Willie Walsh says”Heathrow Hub” runway option should be considered again, as cheaper
Willie Walsh, chief executive of British Airways’ owner IAG, says ministers should not be bound to the Heathrow third north-west runway proposal. He wants the Heathrow Hub option (extending the northern runway to the west) given proper consideration, as it would be cheaper. BA operates the majority of flights (just over 50%) at Heathrow, but Walsh has repeatedly said he is not prepared to pay exorbitant costs – in order to pay for a “gold plated” runway scheme, with all the add-ons. The Heathrow Hub scheme is understood to still be considered by the DFT, as is the Gatwick runway. (All have very serious environmental and economic problems, which is why the government has not been able to come to a rapid decision – largely knowing it would face well informed legal challenges). Walsh believes the Heathrow Hub option would be cheaper, though the costs of surface transport etc to fall on the taxpayer, would be similar. Willie Walsh contrasted Heathrow’s costs with a similar scheme in Dublin, the base of one of BA’s sister airlines in IAG, Aer Lingus. “The airport is talking about building a second runway at a tiny fraction of the cost of the Heathrow third – £350m against £23bn.” He has considered moving more BA planes to Dublin, if and when its 2nd runway is built.
Cheaper Heathrow expansion plan ‘should be put back on table’
Willie Walsh, chief executive of British Airways’ owner, says ministers should not be bound to third runway proposal
By Gwyn Topham Transport correspondent (Guardian)
Thursday 5 May 2016
The alternative, cheaper scheme to expand Heathrow airport should be put back on the table if the government gives the go-ahead for a new runway, according to the boss of British Airways’ owner.
Willie Walsh, the chief executive of IAG, whose airlines, including BA, operate the majority of services at Heathrow, said he did not expect a decision soon – but the “prohibitive costs” meant ministers should not be bound to the airport’s own proposals for a third, north-west runway.
The Airports Commission gave a clear recommendation in 2015 to go ahead with Heathrow’s official scheme rather than the independent hub proposal, which would double the length of the existing northern runway to allow landing and takeoff on the same strip.
However, the Heathrow hub was shortlisted as a viable proposition in the commission’s interim report alongside a second runway at Gatwick, an option that the government said it is still considering.
Walsh said that it was an “interesting concept”, adding: “If you look at Heathrow you’ve got to open your mind … If it gets the nod you’ve got to look seriously at both of the options.”
He said the hub proposal, developed by the former Concorde pilot Jock Lowe, would cost a “hell of a lot less” than the £23bn price – including new roads – that the commission estimated Heathrow’s third runway plan would cost.
Walsh said: “I honestly can’t see how you can spend that much money on an airport and not discourage people from flying there.”
Landing charges for airlines would go up significantly to finance the construction, according to the commission. Walsh added: “We have to look not only at whether the demand exists – which I believe it does – but whether you can match that demand with something that’s affordable.”
He contrasted Heathrow’s costs with a similar scheme in Dublin, the base of one of BA’s sister airlines in IAG, Aer Lingus. “The airport is talking about building a second runway at a tiny fraction of the cost of the Heathrow third – £350m against £23bn.
“It gives us an attractive option to continue to grow on the transatlantic and serve cities in Britain and Europe that we won’t be able to connect through Heathrow.”
The frontrunners in Thursday’s London mayoral election, Labour’s Sadiq Khan and Conservative Zac Goldsmith, both oppose Heathrow expansion and back Gatwick.
Walsh warned bluntly on Gatwick: “I don’t think the business case exists.” He said most airlines only chose to operate at Gatwick if they could not get in to Heathrow, particularly on business routes.
The IAG chief executive was speaking aboard British Airways’ inaugural flight from Heathrow to San Jose in California – the first direct link from Europe to the airport closest to the Silicon Valley HQs of Apple, eBay, Google and other tech companies.
‘I’m not leaving IAG. This is my last job’
Walsh insisted he will not be retiring imminently, despite previously having said he would be stepping down at 55 – an age he will reach in October. He said he was fitter than ever after a dramatic recent weight loss that he ascribed to kicking a 12-a-day cappuccino habit and turning to salads in the IAG office.
Walsh said: “As a pilot, retirement age was 55. I was getting used to the idea. Now that I’m approaching that age, I’m realising that 55 is very, very young.
“I foolishly made those comments some time ago and I’m never afraid to admit when I got it wrong. There’s a lot more [to do]. I’m not leaving IAG. As far as I’m concerned, this is my last job.”
2nd runway at Dublin airport threatens Heathrow’s position as main IAG hub
Heathrow may face more competition for hub traffic from Dublin, if there is a 2nd runway in 2020 – and airlines prefer using Dublin rather than Heathrow. This might mean Heathrow being partly sidelined. In May 2015 Aer Lingus, the Irish flag carrier, was bought by IAG (International Airlines Group) – which owns British Airways. As part of IAG’s takeover there was the benefit of new routes and more long-haul flights from Dublin, where Aer Lingus is one of the two main airline customers, along with Ryanair. Willie Walsh, IAG’s CEO, said in 2015 that owning Aer Lingus would allow IAG “to develop our network using Dublin as a hub between the UK, continental Europe and North America, generating additional financial value for our shareholders”. Willie Walsh believed that buying Aer Lingus was a wise move, as it was “inevitable” that Dublin would get a 2nd runway in the next few years. IAG believes that it can expand the group’s flights via Dublin or Madrid – especially if there is no new runway at Heathrow. It could have the impact of removing business from Heathrow – British Airways is the largest airline there with around 50% of the slots.
Dublin Airport may buy 40 homes, already badly affected by noise, in bid to step up 2nd runway plans
Dublin airport was given consent for a 2nd runway in 2007, but due to the recession it was not started. There are now plans to start work in 2017, for completion in 2020, though as much has changed in the years since 2007 on the aviation market, questions are asked about whether the original consent should still be valid. Due to the inevitably increased noise from the 2nd runway, it is likely that around 40 houses (mainly in the St Margaret’s area 2-3km from the airport) would be bought by the airport, and negotiations are planned. Triple glazed window insulation will probably also be suggested for hundreds of other properties including schools. A spokeswoman for the St Margaret’s Concerned Residents Group said the affected 30 home owners in her association are devastated but have no choice. The airport has assessed the level of noise necessitating house purchase based on 90 days of the airport’s busiest months from June to September. Residents, some of whom have been in the area for three generations, fear that a 2nd runway, with increasing frequency, growth in long haul services and more larger aircraft Dublin would compound the noise problem. The 40 homes are those affected now. (There would be a whole lot more with a 2nd runway).