Heathrow: BA and Virgin warn over fees hike

Heathrow: BA and Virgin warn over fees hike

A period of bitter political and legal wrangling has been triggered today with the delivery of the government's long-delayed decision on airport expansion.
 
Prior to the third runway at Heathrow being given the nod, both British Airways and Virgin Atlantic warned that landing charges at the London hub were already the highest in the world and a further rise to help fund expansion was not an option.
 
The Heathrow decision is the subject of around a year of consultation before Parliament votes. Only then will it enter the planning process.
 
Expansion will be dependent on a series of conditions being met. This includes a ban on night flights, a legal block on any fourth runway, guarantees on the expansion of domestic flights and more passengers using public transport to cut pollution.
 
The government will also urge Heathrow to cut the cost of the £17.6 billion scheme, which the airport claims claims can be partially open by 2025.

Willie Walsh, chief executive of BA parent company International Airlines Group, has said that the “gold-plated” facilities will send passenger charges soaring as Heathrow’s shareholders seek a rapid return on their investment.

He said they could double from about £20 to £40 a flight, making it almost impossible to accommodate cheaper, short-haul journeys. Heathrow said over the weekend that it would “keep prices flat on average”.

The concerns were reiterated last night by Craig Kreeger, chief executive of Virgin Atlantic, Heathrow’s second biggest customer. Virgin will appeal to the Civil Aviation Authority to cap charges at current levels.

He told The Times: “We support Heathrow, but not at any cost. The final scheme must be affordable and cost-efficient, and passengers today must not be expected to pay for a runway and terminal facilities that won’t be open until 2025 at the earliest.

“Heathrow passenger charges are already the highest in the world. Adding further costs to today’s tickets is simply not an option.”

IAG has threatened to expand its operations in other airports such as Dublin and Madrid if Heathrow becomes unaffordable.

It said: “If Heathrow is to deliver their promise to improve the UK’s ability to compete globally then this project must be delivered at a cost that is affordable to passengers. Heathrow is already the most expensive hub airport in the world.”

The decision in favour of Heathrow is expected to trigger at least three separate legal cases, including a coalition of four Conservative councils, including Windsor and Maidenhead in prime minister Theresa May’s constituency.

Its case centres on the claim that Heathrow already breaches legal air pollution levels because of the number of diesel vehicles driven to the site and further expansion would be unlawful.

In a letter to the airport sub-committee which will determine which airport expansion option to support, Gatwick chairman Sir Roy McNulty said: “Gatwick expansion is the progressive competitive option.
 
“It would build on the success of airport competition that has seen more choice, improved services and lower fares for passengers. It would help write the next chapter in this success story rather than turn the clock back to the old monopoly of the past.
 
“Britain needs a competitive new runway open as soon as possible, a failsafe path to overseas markets and to growth. And that puts a premium on certainty. 
 
“Give Gatwick the green light and we can help guarantee balanced growth for all of Britain. A London with two world class airports can send a powerful signal to the world that Britain is truly open for business.”

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