Airlines call for ‘fundamental’ reform of charges before Heathrow expansion
IAG and Virgin Atlantic have urged regulator the CAA to prevent passengers and airlines being ‘locked into higher charges for decades to come’.
Airlines using Heathrow Airport are calling for “urgent and fundamental” reform of its charges as they expect passengers to be hit by a further rise in costs to pay for a third runway.
The bosses of British Airways’ parent company IAG and Virgin Atlantic urged regulator the Civil Aviation Authority (CAA) to prevent passengers and airlines being “locked into higher charges for decades to come”.
Their plea was also supported by Surinder Arora, who owns a number of hotels serving the west London airport, and Heathrow AOC, which represents airlines using the hub.
The group claim record-breaking passenger numbers and the prospect of expansion “mask the fundamental problem with Heathrow”.
They wrote: “For too long the regulatory model’s failure to constrain the monopoly has harmed consumers, led to squandered spending and diminished Heathrow’s hub status and competitiveness.
“With the prospect of expansion, which would be paid for by passengers, it is now time for the regulator to take action.
“This is why we have come together to submit our joint proposal to the Civil Aviation Authority for an urgent and fundamental review of Heathrow.
“This collective call is born out of the spiralling costs at the airport, which are being shouldered by customers and airlines alike.”
The CAA determines the cap on per-passenger landing charges that airlines must pay to Heathrow.
Airlines pass on the cost of these to passengers through fares.
Chancellor Rachel Reeves gave her support for expansion of the airport in a speech on growth last month.
The cost of the third runway project was estimated at £14 billion in 2014, but this is likely to have risen sharply.
Heathrow declined to comment.
A source at the airport said it plans to propose a different regulatory model for a third runway, but it makes “little sense to suggest that passengers will have new runways and terminal buildings for free”.
Selina Chadha, group director for consumers and markets at the CAA, said: “We have received a submission asking us to conduct a review of Heathrow’s economic regulatory model, and we will carefully consider it as part of our commitment to effective regulation.
“We will always focus on delivering in the interests of consumers, while supporting growth, investment and efficiency.”
