Heathrow: BA and Virgin in call for ‘urgent’ reform before expansion
Heathrow’s airlines have joined forces to call for an urgent re-think of the way in which the hub is regulated, amid soaring passenger charges and a general decline in standards.
Virgin Atlantic, the IAG and Heathrow AOC, which represents the interests of the airport’s airlines, urged the aviation regulator on Monday to launch a “fundamental review” into the current model, which they argue is “not fit for purpose.”
They were joined by Surinder Arora, the billionaire hotel operator and chair of the Arora Group.
The new joint campaign is lobbying for any changes to be implemented before investment in expansion, but without delaying a third runway.
It comes following a fierce and long-running spat between the UK’s busiest hub and its airlines over the level it sets passenger charges.
Airlines argue Heathrow’s monopolistic structure, which sees it act as the sole operator of all of its terminals, has led to inefficient spending and decision making that goes against the interests of its consumers and airlines.
Heathrow has become the world’s most expensive airport over the last 15 years despite growing concern over customer experience and the state of its infrastructure. Passengers now face £1.1bn more in charges than if they were set in line with equivalent European airports, the campaign group claimed on Monday.
Chatter over Heathrow’s long-delayed third runway finally getting the go-ahead has further fuelled concern over how the expensive project will be funded.
“The current regulatory model at London Heathrow is simply not fit for purpose and does not sufficiently constrain Heathrow’s monopoly power,” Shai Weiss, chief executive of Virgin Atlantic, said.
“Despite having the highest passenger charges in the world, Heathrow is failing consumers, airlines and the UK economy, with ageing facilities and a declining customer experience.”
Luis Gallego, CEO of the IAG, said: “As an international airline group, we compare the experience for passengers at Heathrow with other airports, and the experience does not match the cost.
“We would like to work with the industry, the Government and the CAA and recommend an urgent review in to the regulatory system at Heathrow, to improve the affordability and experience for travellers, so that it can become a leading global airport once again.”
However, a Heathrow source said it made “little sense to suggest that passengers will have new runways and terminal buildings for free as they will require investments over and above current regular investment levels.”
The source added that management at the airport had “already told airlines and government that it would propose to look at a different, longer-term regulatory model for the third runway if an application is submitted.
“Heathrow is keen to run a transparent process and work in partnership with airlines, the regulator and Ministers to put in place a model that delivers the benefits of expansion for the UK as quickly as possible – including the lower airfares that consumers can expect as a result of new capacity being unlocked.