British Airways chief: break up Heathrow monoploy to cut costs

TRANSATLANTIC: British Airways work out of Terminal 5 in John F Kennedy Airport in New York

International Airlines Group (IAG), the owner of British Airways, has told the Civil Aviation Authority that “Heathrow’s monopoly should be broken up” with the ability for terminals to be run by third parties.

In a submission to the Civil Aviation Authority (CAA), IAG said that Heathrow’s expansion 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.

IAG urged 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. The 92-page draft carried only three lines on costs despite the price tag being critical to the development’s success.

Willie Walsh, IAG chief executive, 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”.

British Airways are one of Heathrow’s biggest airlines, serving over 170 destinations through the megahub. It also runs Terminal 7 at New York’s JFK. In the UK newspaper The Guardian, a spokesman for BA is quoted as saying: “Anyone who has had the misfortune of connecting through JFK airport will know this is not a passenger experience we should seek to replicate at Heathrow. At Munich and Frankfurt airports, only one airline dominates – again, something which is against the interests of our passengers.”

Aside from British Airways, IAG owns Aer Lingus, Iberia and Vueling.