Airlines seek fresh reassurances over Heathrow expansion costs

Airlines seek fresh reassurances over Heathrow expansion costs

Airline bosses are demanding fresh reassurances that any extra costs won’t be passed on to them after a group of MPs backed Heathrow expansion with a £14 billion third runway.

The cross-party transport select committee voiced the need for safeguards to be imposed on expanding the west London hub to ensure that the interests of passengers are protected, and the adverse environmental, social and health impacts on affected communities are addressed.

These include:

• Air quality
• Surface access
• Regional connectivity
• Scheme costs and airport charges
• Noise – night flight band extended to seven hours
• Community impacts and compensation
• Resource and waste management.

Sections of the government’s draft airports national policy statement (NPS) dealing with these issues should be revised before a final statement is tabled for approval.

The committee also identified associated policy measures that are required if expansion at Heathrow is to be delivered effectively.

These include:
• Policy on airspace change
• Wider government policies on air quality, noise and surface access improvements
• Effective use of existing airport capacity.

Committee chairwoman Lilian Greenwood MP said: “The north-west runway scheme, as set out in the draft NPS, is the highest cost expansion option and one of the largest privately financed infrastructure projects anywhere in the world.

“At present, the draft NPS does not guarantee that passengers will be protected from the cost risks associated with the scheme. The secretary of state must set out how airport charges will be held down.”

Iata welcomed the endorsement of Heathrow as the right location to expand airport capacity, but warned that costs could still spiral out of control.

The airline trade body also backed recommendations that the government consider giving the Civil Aviation Authority greater powers to regulate Heathrow’s passenger and airline charges, and that these fees be held flat in real terms.

Willie Walsh, chief executive of Heathrow-based British Airways owner International Airlines Group, said: “Heathrow is the world’s most expensive hub airport and its current costs proposal is exorbitant and unacceptably vague.
“The transport select committee’s conclusion that airport charges must be kept at today’s levels, as this is in customers’ interests, is very welcome.

“It’s critical, as recommended, that the NPS includes a detailed cost breakdown with the condition that airport charges be held flat in real terms, before Parliament votes on it. Also, we endorse that the CAA should test whether the scheme is affordable before it can proceed.

“We agree that the Department for Transport should look at giving the CAA additional powers to control costs and regulate airport charges effectively. We believe that the way to drive costs down is by introducing competition within Heathrow and the CAA must have the power to let this happen.

He added: “We share the committee’s concerns about the lack of detail on how the new runway will bridge the M25, one of Europe’s busiest motorways, and the fact that no costs have been factored in for this.

“Finally, we’re pleased that the committee has acknowledged that domestic routes are based on airlines’ commercial considerations. It notes that they’ve declined in recent years and that this won’t change if airport charges increase.”

Virgin Atlantic supported the committee’s recognition of the need to provide more protection for passengers.

“Our customers already face the highest airport charges in the world, and they should not be expected to pay even more for expansion,” the airline said. “That is why we have called for the introduction of a passenger cost guarantee, setting out the total budget for delivering the expansion, committing that passenger charges will be less than or equal to today’s in real terms, and guaranteeing that Heathrow covers the costs of any overspend.”

Other reaction:

Airlines UK chief executive Tim Alderslade:  “The transport secretary has said previously that consumers – not Heathrow shareholders – must stand to gain from expansion and that charges should remain at least at current levels – a position the committee has endorsed.

“The government should now follow through on its advice and bulk up the wholly inadequate section on cost in the NPS – and set out how it will use the planning process to assess – independently – the scheme’s affordability. It will be at this stage that airlines – together with the CAA – can judge for themselves the likelihood of Heathrow being able to deliver on its promises to keep charges down, and until then they will reserve the right to withdraw support if this is not achievable.”

Board of Airline Representatives in the UK chief executive Dale Keller: “We are satisfied that the committee upheld airline concerns that a blanket night ban pre-empts the Development Consent Order process and community consultation on alternative, and potentially more favourable, outcomes that should be determined through joint working between airports, airlines and communities.

“We also welcome the recommended condition that airport charges be held flat in real terms as significant for passengers, despite falling short of the passenger charges guarantee that airlines had sought.”

Manchester Airports Group corporate affair director Tim Hawkins: “Today’s report by the transport committee highlights the immense challenges and risks associated with expanding Heathrow, and it’s clear that any new runway in the south-east is more than a decade away.

“That’s why we agree with the committee conclusion that government must not waste this opportunity to actively support airports, like Stansted and Manchester, that can deliver that connectivity now.

“As a matter of urgency, government must now match its support for Heathrow with specific and practical proposals to maximise the UK’s global connectivity in the period up to 2030, including support for critical and long overdue investment in rail connectivity into Manchester, Stansted and East Midlands airports.”

Jock Lowe, director of Heathrow Hub, the alternative proposal for an extended runway: “By putting so many conditions on the third runway and exposing its many flaws, the transport select committee has damned it with faint praise.

“Rather than waste any more time, secretary of state Chris Grayling should tell Heathrow to drop its expensive and complicated plan and adopt ours instead.

“The NPS can easily be amended to include the option of the extended runway before being voted on by Parliament.”

Aviation Environment Federation spokeswoman Cait Hewitt: “The environmental challenges the committee identifies – uncertainties about air quality impacts, absence of government policy on carbon, and the lack of any quantifiable noise limits – are not issues that can be easily dealt with using a bit of redrafting.

“As the committee makes clear, the plans are wide open to legal challenge and riddled with gaps and uncertainties that MPs should be aware of if the vote goes ahead as planned.”

CBI infrastructure and people managing director Neil Carberry: “It’s now critical that the NPS is finalised and approved by Parliament by the summer to allow construction to begin by 2020, and a new runway to be operational before 2030. This will be crucial if we want to set ourselves up for success and be an outward-looking, trading nation, post-Brexit.”

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