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Heathrow expansion cash under threat from BA

Heathrow

Funding for Heathrow expansion could be in jeopardy after British Airways (BA) chief executive Willie Walsh threatened to expand the airline at other London airports due to Heathrow’s higher landing charges.

Heathrow’s third runway funding plans rely on money recouped from airline charges, which will in part be passed on to customers in the form of higher landing charges. As Heathrow’s biggest airline reportedly operating around half the flights out of the airport, losing BA flights would harm the airport’s ability to secure costs for the third runway.

Walsh warned that passengers would not want to fly from an expanded Heathrow due to those higher landing charges. Instead Walsh told delegates at the Airport Operators Association conference that he may add services at Stansted or Gatwick.

Heathrow’s initial expansion plans were due to be published for consultation in the summer but were pushed back until early next year due to disagreements with airlines over high passenger landing charges.

“I may as well expand at Gatwick — I have got a strong presence at Gatwick — or go to an airport like Stansted because there are a lot of people who will be driven by the price and they are not going to want to fly from Heathrow,” said Walsh.

Walsh has previously said that airlines would refuse to pay for a runway which could see costs and delays “spiralling out of control”.

A spokesperson for Heathrow said: “Working closely with all our stakeholders, including IAG [BA parent company], we recently announced good progress on meeting the Government’s challenge to expand Heathrow with charges close to current levels.”

The spokesperson added: “The debate around which site is best placed to expand has been settled and we should all be focussed on delivering a third runway at Heathrow that will deliver economic benefits and jobs across the whole of the UK, helping the country make a success of Brexit.”

Meanwhile transport secretary Chris Grayling told an audience at the same conference that keeping landing charges at Heathrow as close to current levels as possible was “vital to its success of the scheme”.

Last week Grayling reopened the public consultation on the draft Airports National Policy Statement (NPS) in light of fresh evidence on air quality impacts and passenger demand.

Yesterday (1 November) the transport select committee relaunched an inquiry into the draft NPS to check whether it is sufficient for parliamentary approval, due in the second quarter of next year.

Transport committee chair Lilian Greenwood said: “The Department for Transport has launched consultation on the revised version of the draft Airports National Policy Statement.

“Our inquiry will examine, in detail, the Government’s plans for delivering the new runway, including the economic benefits, mitigating the environmental impact and the action proposed to support affected communities.”

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