Virgin Atlantic and British Airways owner’s fury at Heathrow charge hike
Plans for a fresh landing charge hike at Heathrow Airport have triggered fury from its largest airline stakeholders, British Airways and Virgin Atlantic.
The UK’s biggest airport on Friday announced its intention to hike the levy it charges airlines for using its runways by 17 per cent, a move that will likely push up ticket fares.
Average landing charges over the next five years are expected increase to around £33.26 per passenger, from £28.46.
It comes as part of wider plans for £10bn in private investment over the next half decade as the West London airport aims to carry 10m more passengers by 2031.
Heathrow has submitted its proposals to the Civil Aviation Authority (CAA) that would bring annual passenger capacity to 92m while building out existing terminal space for new shops, lounges and restaurants.
Virgin Atlantic said it “totally” agreed Heathrow needed to improve customer experience. “However, only Heathrow with its monopoly power as the UK’s only hub airport would think that this £10bn investment plan represents value for money and that’s before any third runway expansion costs are factored into the equation.”
“Heathrow says that its shareholders will contribute £2bn equity but it is ultimately consumers and airlines that pay the bill,” a spokesperson for the airline, which is part of a consortium pushing for a regulatory shake-up at the airport, added.
“Heathrow is already the most expensive airport in the world and this proposal demonstrates Heathrow’s inability to invest capital wisely and efficiently. Therefore, we continue to call on the CAA to undertake an urgent fundamental review of Heathrow’s economic regulatory model, which is simply not fit for purpose.”
IAG, the airline conglomerate which owns British Airways, Aer Lingus and Vueling, also welcomed Heathrow’s “intent to improve passenger experience,” but argued its plans needed “significant revision.”
We must invest, says Heathrow boss
Both Virgin and IAG claim Heathrow’s landing charge hike would be much higher than the airport claims, at anywhere between 25 to 27 per cent.
“The suggested £10bn investment would be paid for by passengers and airlines, raising serious concerns about affordability and value for money,” an IAG spokesperson said.
Heathrow is currently pushing ahead with long-delayed plans for a third runway, a project that received the backing of Chancellor Rachel Reeves earlier this year.
Leaked documents seen by City AM reveal the hub’s plan to upheave car parking for the expansion would cost more than the entire expansion of its closest rival Gatwick, which is lobbying for a £2.2bn second runway. Those costs would likely fuel any increase in passenger air fares.
Heathrow boss Thomas Woldbye said: “We’re making good progress on our strategy to become an extraordinary airport – having become Europe’s most punctual major airport so far this year. But our customers want us to improve our international rankings further, as do we.
“To compete with global hubs, we must invest. Our five-year plan boosts operational resilience, delivers the better service passengers expect and unlocks the growth capacity airlines want with stretching efficiency targets and a like-for-like lower airport charge than a decade ago.”
