Heathrow tries to make out that its 3rd runway is vital, as it will lower fares (so increasing yet further the number flying)

Heathrow has accused British Airways of acting against “the consumer and national interest” by attempting to slow down its expansion and “depriving passengers of lower fares.” They would say that, wouldn’t they?  BA’s parent company, IAG, has complained to the CAA about the approximately £3.3bn Heathrow will spend on preparations for the third runway, accusing the airport of covering up costs that will affect airlines.  BA is of course not pure in this; it wants to prevent other airlines at Heathrow, competing with it. It has no qualms about its CO2 emissions rising. Heathrow wants airlines (IAG is the main airline company using Heathrow) to pay towards its 3rd runway plans, before the expansion is complete. IAG is not at all keen on that. Rather pathetically, Heathrow is terrified of being overtaken by any other European airport. Holland-Kaye said: “In two years’ time Charles de Gaulle [in Paris] will overtake Heathrow as the biggest airport in Europe.”  They like to make out that would be a terrible thing for Britain (which it would not be).
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Heathrow accuses BA of acting against UK and consumer interests

Airport boss hits back in third runway row by saying airline is trying to slow down expansion

Heathrow has accused British Airways of acting against “the consumer and national interest” by attempting to slow down expansion of the airport and depriving passengers of lower fares.

BA’s parent company, IAG, has complained to the regulator about the approximately £3.3bn Heathrow will spend on preparations for the third runway, accusing the airport of covering up costs that will affect airlines.

The airport’s chief executive hit back at IAG for keeping fares high and attempting to stave off competition. John Holland-Kaye said: “The affordability debate has been around the wrong thing, landing charges of £20 per passenger, rather than competition on fares.

“We’re getting on with building the third runway. What IAG would prefer to do is not spend money until after we’ve got planning permission, and delay by two or three years. That’s not in the consumer interest or national interest. In two years’ time Charles de Gaulle [in Paris] will overtake Heathrow as the biggest airport in Europe.”

Virgin Atlantic has been campaigning to gain up to a third of the new slots from the third runway, saying it would allow the airline to become the UK’s second flag carrier and target up to 84 new routes and lower fares by 10% on routes where there is currently no competition.

Sir Richard Branson, Virgin Atlantic’s founder and main shareholder, said BA “should have a competitor that has 35-40% [of slots] at least”. He added: “We ‘re going to show where BA has sole use on a [route], fares are higher – and by having a competitor we can keep them more honest.”

Shai Weiss, Virgin Atlantic’s chief executive, said: “We have 5% of the slots and we want 15%. There are 18.5 million passengers at Heathrow flying on monopoly routes who could have lower fares.”

This month Willie Walsh, the IAG chief executive, said he believed the third runway would not get built and he called on the Civil Aviation Authority to prevent the cost being passed on through airline charges. “Ultimately this is money that is being spent – and in my opinion wasted – that gets passed through to consumers,” he said.

Holland-Kaye praised Virgin’s plans and said he thought a 10% reduction in fares was “a conservative estimate”. He said: “This is transformational. This is a massive opportunity to get real competition in check and lower ticket prices.”

He said slot allocation would need to be overhauled to ensure either easyJet or Virgin could build a network, including key short-haul routes. “They need that to be a credible scale player.”

Meanwhile Branson, speaking in Tel Aviv, revealed that the planned flotation of Virgin Galactic, his passenger spaceflight venture, was expected to take place on Monday on the New York stock exchange. He said he would be “floating in a different way on Monday, and in space next year”.

The IPO is expected to value the company at $1.5bn (£1.15bn). More than 600 prospective passengers have placed deposits on a $250,000 fare for the 90-minute flight out of the Earth’s atmosphere.

https://www.theguardian.com/business/2019/oct/23/heathrow-accuses-ba-acting-against-uk-consumer-interests?CMP=Share_iOSApp_Other

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See earlier:

Willie Walsh (IAG) warns again of excessive, out-of-control, unknown Heathrow 3rd runway costs

Willie Walsh, CEO of IAG, has always been against the very high costs of expanding Heathrow. He has again said he does not trust Heathrow to keep costs reasonable, and he is opposed to expansion – for which costs would escalate. He said Heathrow has “understated” the costs of expanding and the project is “out of control”, and there was “absolutely no way” Heathrow could build everything planned on budget. He thinks that while Heathrow continues to quote a figure of £14 billion for the investment required, the “true costs” would be over £32 billion. He believes building the 3rd runway and associated works alone will require £14 billion. And then a further £14.5 billion would be required to add terminal capacity and other infrastructure on the existing site. Walsh thinks just extending Terminal 5 could cost a further £3.5 billion. Heathrow now claim their costs even before building anything, are £3.3 billion for planning and preparation. Far higher than earlier estimates.  It is a risk that the runway would be under-utilised, as costs would have to be too high – to pay for the excessive spending – to tempt airlines to use it.  That would also make any net economic benefit to the UK very negative. 

http://www.airportwatch.org.uk/2019/08/willie-walsh-iag-warns-again-of-excessive-out-of-control-unknown-heathrow-3rd-runway-costs/

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Heathrow plans to increase 3rd runway costs – to £2.9 bn – before approval, hoping it will be too costly to scrap its plans

Heathrow plans to triple the amount it spends on its third runway proposal, to £2.9bn – well before getting final approval. This either means air passengers using Heathrow would be charged more (something the industry and the government do not want), or else the taxpayer will be charged. Even if the runway never goes ahead.  The CAA has a consultation about the costs and how Heathrow has been speeding up the process, spending ever more money. (The legal challenges are now going to appeal in October, but Heathrow is pressing ahead with its DCO consultations). Especially on carbon emissions, air pollution and noise grounds, it is entirely possible the runway will be blocked and the DCO will not be granted.  The CAA says it has asked Heathrow “to consider different options for this spending and the implications of this spending for the overall programme timetable and the interests of consumers.” [Not to mention the taxpayer, who may end up paying …] Heathrow is increasing the amount of its “Category B” costs and “early Category C” costs. They want to increase the amount spent already to be so large, that it effectively cannot be cancelled. Detailed costs still have to be outlined, but Heathrow is expected to submit its initial business plan to the CAA for review towards the end of this year.

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