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Heathrow’s key customers – airlines and hotels – are demanding lower charges and higher standards at the UK’s busiest airport.
Virgin Atlantic, British Airways’ parent IAG, the Heathrow Airline Operators’ Committee (AOC) and the Arora hotel group have joined forces in an unprecedented coordinated attack on the airport’s regulatory regime.
They hope to persuade the Civil Aviation Authority (CAA) “to conduct an urgent and fundamental review into the way in which Heathrow, the UK’s only hub airport and the largest in Europe, is regulated, for the benefit of consumers, businesses and the UK economy”.
In a new campaign called Heathrow Reimagined, they say current arrangements are not fit for purpose.
“Heathrow has become the world’s most expensive airport, with passengers and airlines today paying £1.1bn more each year than if charges were in line with equivalent major European airports,” the partners said in a statement.
“Heathrow Airport Limited’s substantial market power has, for too long, given it an incentive to spend inefficiently which means it has acted against the interest of both consumers and airlines.”
At present, charges are calibrated by the CAA according to the “regulated asset base” of Heathrow – broadly speaking, the value of the airport facilities. When investment is made into new facilities, the asset base increases.
Shai Weiss, chief executive of Virgin Atlantic, said: “Heathrow is failing consumers, airlines and the UK economy, with ageing facilities and a declining customer experience.”
Nigel Wicking, chief executive of Heathrow AOC, said: “The airline community want to offer travellers, to and from the UK, a great experience through Heathrow and we want growth, also avoiding the disproportionate costs we too often see by Heathrow Airport Limited.”
Surinder Arora, founder of the Arora Group, said: “I have worked in and around Heathrow for several decades and have seen with my own eyes the decline in what used to be the world’s best airport. The current monopoly at Heathrow doesn’t only vastly overcharge passengers on aviation fees but also on their parking and a variety of other services.”
The government is backing plans for a third runway at Heathrow, which is currently expected to cost £14.4bn. The project could increase passenger numbers by 45 million from the current 84 million.
But the campaign group says Istanbul is developing a completely new airport with capacity for up to 200 million passengers for £10bn.
After the chancellor backed the third runway plan, the airport said: “Heathrow is the UK’s gateway to growth and prosperity. A third runway and the infrastructure that comes with it would unlock billions of pounds of private money to stimulate the UK supply chain during construction.
“Once built, it would create jobs and drive trade, tourism and inward investment to every part of the country. It would also give airlines and passengers the competitive, resilient hub airport they expect while putting the UK back on the map at the heart of the global economy.”
A Heathrow source said the airport proposes a different, longer-term regulatory model for a third runway – but that, as with other goods that consumers buy, those that use a service or product will have to pay for the cost of providing it. The source said Heathrow is keen to expand, and that passengers can expect lower airfares as a result of new capacity being unlocked.
Separately, the airport has unveiled a refurbished and rebranded private terminal, “providing a discreet, luxury experience to high-profile-guests”.
The Windsor by Heathrow, as it is called, charges £3,812 for up to three “ultra-high-profile guests from world leaders to A-list celebrities – offering unmatched discretion, convenience and a seamless travel experience”.
