Air Passenger Duty should be cut on UK domestic return flights to encourage the regional connectivity that an expanded Heathrow airport could offer.
The call came from Iata to the UK Transport Select Committee together with a plea for charges at the west London hub not to be hiked to pay for a third runway at the airport.
Heathrow is 35% more expensive than Frankfurt, 60% more than Paris CDG, 115% more expensive than Amsterdam Schiphol, and 175% more expensive than Dubai.
Iata regional vice president for Europe, Rafael Schvartzman, said: “Airlines in Europe are operating on a 5% margin, so any additional costs are critical to the viability of a route.
“It is therefore essential that Heathrow charges remain flat – or are reduced – and that Air Passenger Duty be reduced on domestic flights.
“If this cannot be met and fares have to rise to cover excessive cost, then the benefits assumed for the third runway will not be maximised and the competitiveness and viability of certain routes called into question,” he warned.
Reforms to air traffic management will also be crucial for the success of the new runway.
“Expanding Heathrow without putting in place the necessary air traffic control reforms would be like buying a
Christmas tree and not putting any decorations on it,” said Schvartzman.
“The government must support the Future Airspace Strategy which is looking to make critical improvements to the airspace.”
Iata supports Heathrow as the location for a new runway for the south-east of England and the best option for meeting the government’s objectives to retain the UK as one of the world’s leading aviation hubs.
“But Heathrow cannot be expanded at any price. Affordability remains the airlines main concern,” said Schvertzman. “While we welcome some evidence of a cheaper solution emerging, the level of risks associated with cost and schedule remains unknown due to the low level of maturity associated with the programme.”
He added: “Airlines recognise that night noise is a sensitive topic and we support the need for meaningful respite from noise. We believe this can be achieved whilst allowing valuable and established connections to be safeguarded.
“It is vital to maintain the existing early morning arrivals which link the UK to important emerging markets in the Far East. Early morning arrivals have huge economic value of over £1 billion per year to the economy.
“Because many of these flights will not be able to change their slot times on the origin end of the route there is a big risk that the airlines would be forced to seek alternative European destinations into which to schedule their early morning flights.
“If the night ban is moved to 6am major European hubs will have a two-hour head start on connections. It could mean British business misses out.”