Willie Walsh, CEO of IAG (with over half Heathrow’s slots) again says its expensive 3rd runway plans are “a ridiculous glory project”
Willie Walsh, the boss of British Airways’ parent company, IAG, has again lambasted Heathrow’s expansion plans as a “ridiculous glory project”. He said the £17.6bn plan to build the 3rd runway (just £200 million for the runway itself – not counting the M25 problem) could lead to a “completely unjustified” increase in airport charges, which airlines would have to charge to passengers, denting demand etc. IAG (which owns Iberia and Aer Lingus) have over 50% of Heathrow landing slots. IAG wants a 3rd runway, though it would increase its competition, but they want a cheap no-frills scheme – and have backed the £7 billion cheaper scheme promoted by Surinder Arora. The Heathrow scheme requires the demolition of the BA HQ at Waterside in Harmondsworth and IAG could end up effectively paying its own compensation through increased charges levied by Heathrow. Willie Walsh also said IAG’s new long-haul, low-cost brand Level might one day fly from Heathrow. At present, the subsidiary operates just two aircraft from its base in Barcelona. He hopes it will have 30 planes by 2022, and fly to destinations currently off the BA route map, like secondary cities in China.
HEATHROW THIRD RUNWAY A ‘RIDICULOUS GLORY PROJECT’, SAYS BRITISH AIRWAYS BOSS
Willie Walsh, chief executive of BA parent company IAG, demanded lower costs
By SIMON CALDER (TRAVEL CORRESPONDENT – the Independent)
The boss of British Airways’ parent company has lambasted Heathrow’s expansion plans as a “ridiculous glory project”.
Willie Walsh, chief executive of IAG, said the £17.6bn plan to add a third runway at Heathrow could lead to a “completely unjustified” increase in airport charges, which would have to be passed on to passengers. His firm also owns Iberia and Aer Lingus, and has more than half the slots at Europe’s busiest airport.
Mr Walsh was speaking at the ACTE-CAPA Global Summit at the Sofitel at Terminal 5, BA’s Heathrow base. He said the runway itself would cost only £200m, with the rest of the budget going on other facilities.
The IAG boss championed an alternative scheme by the businessman Surinder Arora, owner of the Sofitel and extensive property around the airport, which he said could save £7bn on the official Heathrow plans.
He also claimed that if British Airways’ HQ at Waterside in Harmondsworth were to be demolished to make way for the third runway, the airline could end up paying its own compensation through increased charges levied by Heathrow.
A Heathrow spokesperson said: “Expanding Heathrow is a once-in-a-generation opportunity to solve Britain’s aviation capacity crisis – with more competition and choice for passengers, improved resilience at the nation’s hub airport and double the cargo capacity for Britain’s exporters.
“It’s critical we get this right, and that is why we are pleased the Civil Aviation Authority has recognised the progress we and our airline partners have made on delivering Heathrow expansion affordably, so that airport charges can be kept close to current levels.”
The boss of Southend airport has weighed in on the expansion debate, demanding lower taxes for smaller airports to take pressure off Heathrow and Gatwick.
Glyn Jones, chief executive of Stobart Aviation, which owns Southend airport, said: “With serious doubts that there will ever be a third runway at Heathrow, the Government needs to address the airport capacity issue now.
“The good news is that there is lots of spare capacity in smaller airports up and down the country, that with a bit of support could be freed up to help.
“Unless we act, our two biggest airports are just going to get fuller and fuller with delays and customer service getting worse and worse.”
The Government is expected to give the go-ahead to the highly controversial expansion of Heathrow in spring 2018.
The IAG chief executive also said that the long-haul, low-cost brand Level might one day fly from Heathrow. At present, the subsidiary operates just two aircraft from its base in Barcelona.
Mr Walsh said it could expand to 30 aircraft by 2022, and fly to destinations currently off the BA route map, like secondary cities in China. But he said the UK’s strict visa rules for Chinese visitors needed urgent reform.
“You can’t do business with the world if you make it difficult for the world to get here.”
Willie Walsh and IAG: Work out cost of crossing M25 before Heathrow runway plan
Willie Walsh, CEO of IAG, says pushing through Heathrow’s 3rd runway should be suspended until there are proper plans of how the airport is going to bridge the M25. The section of the M25 that the runway would have to go over is about the busiest stretch of motorway in the UK, and it is unclear if there would be some sort of bridge (a cheaper option, about 8 metres above the road surface), or a proper tunnel (more expensive for Heathrow). IAG, and British Airways, are concerned the extra cost would mean higher charges by Heathrow, so higher ticket prices. Heathrow says landing charges would remain as close to flat “as possible” but Walsh fears they could double and they raised their concerns in their submission to the inquiry by the Commons Transport Committee, into the draft NPS. There are a few airports globally that have some sort of bridge, with planes taxiing above the road, clearly visible to traffic. None over such a wide, busy section of motorway. In October, when the bridge idea was first suggested (the Airports Commission always presumed a tunnel) papers from Highways England showed it described the scheme as “high risk”, warning of a “a substantial risk of excessive customer frustration about what might be prolonged period of disruption”. IAG is also deeply opposed to Heathrow ending night flights between 11pm and 5.30am, as that risks flights going instead to airports like Frankfurt, losing IAG money.
Willie Walsh reiterates that he will fight Heathrow runway, due to cost; content with 3 hub system for IAG instead
Willie Walsh has reiterated his determination not to pay the exorbitant costs of a new Heathrow runway (and that’s without the costs that the taxpayer would have to pick up for surface access improvements – which could be £20 billion). He said the current proposal to build a 3rd Heathrow runway is “indefensible” from a cost point of view and he will fight it. BA holds over 50% of Heathrow’s slots. Walsh said he was worried about the current Heathrow proposal because there was now “desperation by the airport to get a third runway and they are willing to do anything to get it.” He commented: “So the airport is incentivised to spend money while I am incentivised to save money.” Because the coalition government blocked a 3rd runway in 2010, in January 2011 BA and Iberia were merged to form IAG. Then IAG bought UK airline BMI, to get hold of its Heathrow slots, gaining an extra 42 pairs. That ensured IAG had enough Heathrow slots to secure its ability to compete from its hub base. Since then Walsh has made his plans to use a 3 hub strategy – with Madrid and Dublin as its two others, not depending so much on Heathrow. IAG also owns Iberia, Vueling and Aer Lingus. Dublin will be adding a new runway – probably by 2020.
Airport hotel tycoon, Surinder Arora, wants Heathrow runway built soon – but a bit cheaper
A wealthy hotel tycoon, Surinder Arora, has submitted plans for a 3rd Heathrow. He has been a long time backer of a runway, and says his plan would be £5 billion cheaper than what Heathrow is offering (costing £17.5 billion). He has put his proposal to the government’s public consultation on Heathrow (the NPS consultation actually closed on 25th May.) Heathrow has been trying to find ways to make their runway + terminal scheme cheaper, as the airlines are not keen on paying the higher charges that would be needed. Ticket prices would rise. (ie. lower airline profit). The Arora Group’s proposals include altering the design of terminal buildings and taxiways, and reducing the amount of land to be built on. They know the alterations to roads, including the M25 and the junction of the M25 and the M4, are massive problems and “threaten deliverability” of the runway project. They therefore want to “shift the runway”. Where to? All this shows how very uncertain the runway plan has become, and the immense doubts – especially on money. Heathrow said they would welcome views on various options “in the public consultation later this year.” The plans must first be assessed by the Commons transport committee, be amended by the DfT and then voted on in Parliament …. it is not a quick process.