British Airways threatens to cut Heathrow flights if recovery-undermining airport charges don’t come down
The boss of British Airways’ parent company warned today that the airline will cut Heathrow flights if proposed increases in charges are implemented,
IAG chief executive Luis Gallego said the west London airport’s fees are already among the highest in the world and are becoming “more and more expensive”.
In October, the Civil Aviation Authority (CAA) announced a plan to raise the cap on the airport’s average charge per passenger by up to 76 per cent, from the current level of £19.60 to between £24.50 and £34.40.
Gallego said Heathrow gives the UK’s aviation sector a “major advantage”, but warned that “we need to attract demand to stay competitive”.
He told the Airlines 2021 conference in Westminster today: “The reality is that more than 40 per cent of the people who use Heathrow are connecting passengers. They are simply passing through on their way to other destinations and could easily go by other, more competitive hubs.”
“Hiking charges will not help. It will not attract demand – it will have the opposite effect.”
“If the rise in landing charges goes ahead, I know IAG will not be alone in reconsidering our airlines’ use of Heathrow.”
IAG chief executive Luis Gallego
Gallego’s predecessor, Willie Walsh, told the audience that the UK’s aviation sector risks “shooting everybody in the foot” by allowing Heathrow to hike charges, as passengers “have an option to go somewhere else”.
He said: “By pushing up the charges to such a high level you’re actually pushing people away from Heathrow, which will undermine significantly the recovery of the industry in the UK.”
Walsh, who is now director-general of airline trade body the International Air Transport Association, added: “You can make a strong case that not only should airport charges not go up, but in fact I think you could argue that they could come down and Heathrow could continue to be fully financed.”
Fees
Speaking at the same event, Tim Alderslade, chief executive of trade body Airlines UK, warned that the level of Heathrow’s fees threatens the viability of its expansion project.
He said: “Their inability to keep their charges under control will be the death of runway three.”
A Heathrow spokeswoman said: “Passengers know when they’re getting a raw deal.”
“A £10 to £15 increase in airport charges is not comparable to pushing up economy-class tickets to the US to over £2,000 this Christmas, which is what some airlines are doing.
“It’s true that Heathrow is proposing a higher pandemic price increase than continental airports, but we are neither state-owned nor have we received billions in state aid during the crisis – we rely entirely on private investment.
“Heathrow passengers want a reliable, quality experience. The higher charge will enable us to deliver key investments in the next five years to protect passenger service.”
“Just as Aldi offers great food, plenty of Brits are still very happy to shop at Waitrose and appreciate the value for money they get.”
Heathrow spokeswoman
Under the CAA’s proposals, Heathrow’s exact charge will depend on factors such as passenger demand and commercial revenue, with prices higher if the airport continues to struggle in those areas.
The range is planned to come in effect from summer 2022, with an interim cap of £30 being introduced on January 1.
Charges are paid by airlines but are generally passed on to passengers in air fares.
Heathrow had called for the cap to range from £32 to £43 for the five-year period being consulted on The airport said last month that its losses from the Covid-19 pandemic had hit £3.4bn. Passenger numbers in October were 56 per cent down on pre-pandemic levels.