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05 Feb 2018

BY Rob Gill

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TRFBLI

IAG urges break up of Heathrow ‘monopoly’

British Airways’ owner IAG has called for the government to “break up” Heathrow’s operations by allowing other companies to run the airport’s terminals.

Heathrow aerial image artist impression by night

IAG said in a submission to the CAA that allowing third parties to run Heathrow’s terminals would “provide better facilities more economically and ensure customer charges do not rise to pay for new infrastructure”.

 

The government has adopted the policy of allowing Heathrow to build a third runway but the decision still has to be approved by the House of Commons, a vote which is scheduled to place during the first half of this year.

 

IAG chief executive Willie Walsh added: “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.”

 

But Heathrow boss John Holland-Kaye hit back at Walsh’s claims: “This is a blatant attempt by Mr Walsh to maintain a dominant monopoly for BA at Heathrow and to frustrate the increased airline competition that should result from expansion.”

In December, Heathrow said it could reduce the expected cost of building a third runway by £2.5 billion to £14 billion by developing new facilities above existing buildings at Terminals 2 and 5. But airlines fear that they will face higher passenger charges to pay for the development.

 

“Most major US airports have terminals owned or leased by airlines and there are European examples at Frankfurt and Munich airports,” added Walsh. “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.”

 

In its submission, IAG has urged the government to “state explicitly that the cost of Heathrow expansion to customers should be capped at today’s prices”.

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