A radical plan to break up Heathrow’s ‘monopoly’ to allow third parties to run terminals is being put forward today by British Airways owner International Airlines Group – the airport’s biggest customer.
This would create competition and lower costs for airlines customers, IAG claims in a submission to the Civil Aviation Authority.
Planned expansion of Heathrow with a third runway provides a “great opportunity” for independent companies to design, build and run commercial facilities like terminals. Competition would provide better facilities more economically and ensure customer charges do not rise to pay for new infrastructure.
Better financing options for new infrastructure would be generated providing greater transparency and lower risk, IAG argues.
Heathrow recently revised its tird runway scheme, cutting the cost from £16.5 billion tio £14 billion.
The airline group, which also runs Aer Lingus, Ibeia and Vueling, is urging the government “to state explicitly in its National Policy Statement (NPS) that the cost of Heathrow expansion to customers should be capped at today’s prices”.
A 92-page draft carried only three lines on costs despite the price tag being critical to the development’s success, IAG adds.
Chief executive Willie Walsh said: “Heathrow’s had it too good for too long and the government must confirm the CAA’s powers to introduce this type of competition. This would cut costs, diversify funding and ensure developments are completed on time, leading to a win-win for customers.
“Heathrow’s already reassessed its expansion plans when faced with a new potential developer. Our proposal will ensure it continues to focus on cost control, something it has been reluctant to do in the past.
“This is not rocket science. Most major US airports have terminals owned or leased by airlines and there are European examples at Frankfurt and Munich airports. There’s absolutely no reason why this cannot happen at Heathrow.
“With more passengers and the introduction of internal competition, the airport’s charges should go down. If they remain at current levels we, along with other airlines, support a price cap to ensure they cannot rise and have written to the Transport Select Committee to highlight this”.
IAG’s submission is in response to the aviaition regulator’s consultation on the regulatory framework to support capacity expansion at Heathrow.