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Heathrow operator hits back at 'absurd' claim that expansion will lack competition

Heathrow expansion

Claims that Heathrow Airport Ltd’s expansion plans are uncompetitive have been rubbished by the airport’s operator. 

Heathrow Airport Ltd (HAL) has hit back at accusations filed to the High Court that it has a “monopoly” over proposals for the upcoming expansion and construction of a third runway. 

 Heathrow Hub – which is proposing alternative expansion plans – has claimed that the NPS breaches European Union law because its effect will be “the dramatic extension of [Heathrow Airport Ltd’s] monopoly position in the market for airport operation services at Heathrow”.

It made the claim in a legal argument presented during last month’s Judicial Review of the government’s National Policy Statement (NPS).

The National Policy Statement was approved by MPs in June 2018, paving the way for Heathrow expansion. 

Arora Group, another body with its own expansion proposals also raised concerns about HAL’s existing “monopoly position in relation to the provision of airport operation services and related services at Heathrow Airport”. Arora expressed concern about the “undesirability of Heathrow expansion exacerbating the anti-competitive effects of that monopoly and leading to increased costs to both airlines and consumers”.

The airport’s operator and favourite to deliver the expansion programme has hit back, labelling concerns over a lack of competition as “absurd”. 

“To suggest we have not completed a competitive process is absurd. Our plan was one of over 50 bids considered in the independent Airports Commission process and was the preferred choice, going on to secure overwhelming support in Parliament,” said an HAL spokesperson. 

“Heathrow is always willing and eager to work with anyone that has ideas, as demonstrated by the launch of our Innovation Partners extending opportunities to any company outside the existing supply chain.

“Those advocating the breakup of an airport also demonstrate a complete lack of appreciation behind the complex task of airport operations and should experience the effect this approach has on the likes of JFK [John F Kennedy Airport in New York]. This is not the image people should want to portray about Britain’s front door.”

The spokesperson added: “No other country delivering world-class and growing hub airports – think of Singapore, Atlanta or Dubai – has adopted the fragmented model because it ultimately damages passenger experience and undermines competition between airlines at the airport. New York’s JFK is a prime example – during the recent snow that hit both the UK and the US, JFK’s operations ground to halt whilst Heathrow’s unified management kept the UK’s hub operational throughout.”

A spokesperson for the Civil Aviation Authority, which regulates the tendering process at Heathrow,  added: “We have always been clear that our oversight of Heathrow expansion will be proportionate and targeted. We have designed a set of initial tests to determine whether any alternative proposal is sufficiently mature or credible.

”If a proposal meets our tests, we will look at how the regulatory model would need to be adapted should such a scheme be approved by the Planning Inspectorate and the Secretary of State.”

Heathrow Hub has argued that extending one of the existing runways at Heathrow is a more cost-effective way of expanding the airport, compared to the current plan of a third runway.

Meanwhile, Arora Group has submitted its own plans to expand Heathrow. It claims it can increase capacity to 130M passengers per year for £14.4bn compared to the £31bn HAL proposes to spend. Arora will focus on adding new terminal capacity west of the airport between Terminal 5 and the M25, avoiding the need to redevelop existing terminals.

The transport secretary will ultimately decide whether Arora Group or HAL is granted a development consent order for the expansion programme.

The House of Commons voted in favour of building the third runway at the airport, approving transport secretary Chris Grayling National Policy Statement by 415 votes to 119, in June last year.

A ruling following the Judicial Review is expected by the end of May.

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