Heathrow: Sir Richard Branson eyes terminal as Virgin Atlantic and British Airways push for more control
Sir Richard Branson could end up taking over one of Heathrow Airport’s terminals if the airport succumbs to pressure from airlines to reform its regulatory model.
The billionaire’s airline Virgin Atlantic is plotting to seize greater control of the UK’s busiest hub alongside its long-running rival, British Airways’ parent company IAG.
The two carriers are frustrated at Heathrow’s high landing charges and a regulatory structure that gives it monopoly control over its terminals.
Both Virgin Atlantic and BA want third parties to be allowed to take control, in line with changes introduced at the likes of New York’s John F Kennedy Airport.
According to Virgin’s chief executive Shai Weiss, Sir Richard Branson himself has expressed interest in running one of Heathrow’s terminals as part of an independent consortium.
In a joint interview in the Sunday Times, Weiss and IAG boss Luis Gallego also called for reforms that would give the two airlines’ a vote on investment decisions at the airport.
“We want to create a committee to control the capital expenditure — [and] to bring some kind of competition to challenge Heathrow to be efficient,” Gallego said.
Government approval of a third runway at Heathrow has pushed airlines, retailers and travel firms to act on long-running complaints over how the airport is run. They fear the more than £60bn bill needed for expansion could fall onto their shoulders under the current model.
“A third runway, if you take the numbers that are quoted by Heathrow, will be anywhere between £20bn and £64bn,” Weiss said.
“Shareholders pay for it upfront. But then guess who pays for it in the long run? Virgin Atlantic, British Airways and the other airlines that operate at Heathrow.”
Heathrow’s opposition argues it has abused its monopoly in recent years to become one of the most expensive in Europe, while failing to invest in vital infrastructure upgrades.
Weiss said the current monopoly structure had “yielded a very simple thing: the most expensive in the world.”
A Heathrow spokesperson said: “We agree with airlines that adjustments to the regulatory model will be needed to deliver a third runway. The right framework is needed to enable us to continue to offer value to our customers, while encouraging much-needed private investment into the UK’s national critical infrastructure.
“More than £12bn of private investment at Heathrow has transformed the airport over the past decade. There has not been a lack of ambition or investment when it comes to transforming Heathrow – alongside our customers, we challenge ourselves to continually improve and are delivering on that ambition.
“No major hub airport has successfully implemented independent terminal operations because it is the wrong approach for customers, incentivising siloed, self-interested and short-term decision making that costs resilience while adding inefficient duplication and complexity.”