IATA: Heathrow expansion plans “the right place, at the wrong price”

The International Air Transport Association (IATA) has welcomed the UK Transport Select Committee’s endorsement of Heathrow as the right location to expand airport capacity, but warned that the costs could still spiral out of control.


BEST PLACE FOR IT?: Earlier this year, BA's head said he had no confidence in Heathrow's ability to deliver on time and on budget

The UK Transport Select Committee published a report earlier today, which can be seen here, saying it agreed with the Government that Heathrow was the right place for a third runway, but whilst airlines were keen on the the expansion at the airport, they were wary of cost.

IATA’s Regional Vice President for Europe, Rafael Schwartzman said in response to the report: “The airline community supports Heathrow as the right location to expand airport capacity, but has two overriding concerns: affordability, and operational flexibility. Both are jeopardised by the current plans from Heathrow’s owners.

“The Select Committee’s recommendations on cost control should be essential reading for the government, for Heathrow Airport Holdings Ltd (HAL), and anyone with a stake in the future of air transport in the UK.

“At the moment, we are looking at extra capacity in the right place, but at the wrong price. We need guarantees regarding how costs will be managed, especially if key risks are not known at this stage.”

The report is clear that Heathrow airport charges are the highest in the world, and that any expansion of the airport must be accompanied by a commitment that charges will not rise from the current level. Such a commitment would be in line with comments from the Secretary of State that charges should stay at today’s levels.

“We welcome the Committee’s recommendation that charges should be held flat. And we share the Committee’s concerns on the effects of an increase in charges.

“An unaffordable Heathrow will have a detrimental impact on the competitiveness of the UK’s only hub airport in comparison to rivals in France, Germany and Netherlands,” said Mr Schvartzman.

He added: “HAL have suggested a cost in the region of 14-17 billion pounds to build the third runway—around double the price of the London Olympics.

“The Select Committee have noted that these estimates are optimistic. And HAL have not been clear on the funding of crucial works such as the proposed bridging of the M25 and the relevant surface access schemes.

“The only way these concerns can be addressed is to ensure that there is much greater transparency on the costs of construction. Heathrow is a facility that benefits the entire nation – it is too important not to be under careful oversight.”

Cait Hewitt, from Aviation Environment Federation, said: “It’s no surprise that the Transport Committee says it supports Heathrow expansion. That’s been the case for many years.

“What’s notable is that, despite this, the committee has had to conclude that the Government’s draft runway plan is beset with a list of problems as long as your arm.

“The environmental challenges the committee identifies – uncertainties about air quality impacts, absence of government policy on carbon, and the lack of any quantifiable noise limits – are not issues that can be easily dealt with using a bit of redrafting.

“As the committee makes clear, the plans are wide open to legal challenge and riddled with gaps and uncertainties that MPs should be aware of if the vote goes ahead as planned. The Government has had years to think about these problems. It’s hard to see how it can come up with a convincing case between now and a summer vote that the project can be somehow ‘sustainable’”.

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