British Airways and Heathrow in row over £500m charge for failed expansion plans
Heathrow and British Airways (BA) have become embroiled in a row over a proposal to charge airlines £500m for the airport’s failed expansion plans.
A consultation recommends allowing the airport the bill airlines for costs related to the third runway incurred until February this year.
The plans to build a third runway at Heathrow were blocked in February following a legal challenge.
Willie Walsh, the chief executive of BA owner IAG, said the regulations, which allow Heathrow to raise charges in line with costs, allows the airport to “spend recklessly”.
A spokesman for IAG told the Sunday Telegraph: “In any other business, a wealthy, privately owned company like Heathrow Ltd would have to meet its own sunk costs.
“But Heathrow is a monopoly that will simply pass the bill to the airlines, further damaging UK aviation as it struggles to survive the Covid crisis. The regulator must step in.”
A spokesperson for Heathrow said: “The CAA established an approach to expansion-related costs some time ago – with that approach approved and agreed by airlines, including IAG. We believe this approach should remain.”
The airport has opened talks with unions over a round of pay cuts that will affect roughly half of its 4,700 frontline workers due to a sharp drop in passenger numbers during the Covid-19 crisis.
As a result of the coronavirus pandemic, the UK’s largest airport has lost over £1bn since March, and is now looking to make pay cuts of 15 to 20 per cent.
Meanwhile in August BA said 6,000 members of staff had opted to take voluntary redundancy, as the airline made progress on its mission to cut 12,000 jobs.
BA has said it expects that demand for air travel will not recover for years.