Heathrow charges soar

London's crowded Heathrow airport will be allowed to raise airline charges by a bigger-than-expected 23.5 per cent, giving a boost to the airport's indebted owner but sparking fury among its users.

Shares in Spanish construction group Ferrovial, which bought Heathrow owner BAA in a £10 billion deal in 2006, leapt as much as 8.8 per cent after BAA said yesterday the new charges should help it to complete a much-delayed refinancing of its debts by the end of June.

But Heathrow users such as British Airways reacted angrily to the price controls from regulator the Civil Aviation Authority (CAA), which were more generous to Ferrovial than its previous proposals in November.

"These overly generous charges far exceed what is required to upgrade facilities across Heathrow," British Airways (BA) said in a statement. "The CAA must hold BAA to account throughout the five year period to ensure the airport operator delivers improvements and does not divert funds to pay off Ferrovial's debts."

As well as struggling to refinance its debt amid the global credit market turmoil, Ferrovial has come under fire for service levels at Heathrow, where queues, delays and lost baggage have become commonplace.

The CAA said Heathrow would be allowed to charge £12.8 per passenger in the year starting April 1, and increase this by no more than retail price inflation plus 7.5 per cent in the subsequent four years.

The regulator had proposed a price cap of £11.97 in November, but said it was increasing this to take account of the need for additional investment and security. The CAA set a price cap of £6.79 per passenger for London's Gatwick airport, which is also run by BAA, up from its previous proposal of £6.07.