Airlines operating from Heathrow are urging the UK’s aviation regulator to launch an immediate and comprehensive review of the airport’s financial model, amid fears that carriers—and ultimately passengers—will bear the brunt of funding its multibillion-pound third runway.
The chief executives of British Airways owner International Airlines Group (IAG) and Virgin Atlantic have written to the Civil Aviation Authority (CAA), calling for a fundamental overhaul of Heathrow’s regulatory framework to curb “spiralling costs” and prevent further increases in passenger charges.
Luis Gallego, CEO of IAG, and Shai Weiss, CEO of Virgin Atlantic, warned that Heathrow’s pricing model “actively encourages inefficient overspend” and has led to the highest airport charges in the world. Writing in The Times, they stated: “With runway expansion plans being drawn up, the scale of investment means that passenger charges will rise again. There must be wholesale reform, which is necessary and achievable without delaying spades in the ground.”
Their appeal is backed by Nigel Wicking, CEO of Heathrow AOC, which represents airlines at the airport, and Surinder Arora, a billionaire hotel operator with major interests in Heathrow. It comes just days after Chancellor Rachel Reeves reaffirmed government support for the third runway as part of plans to stimulate the UK economy.
While expansion at Heathrow has long been viewed as a way to increase capacity and boost economic growth, significant hurdles remain—including environmental concerns over carbon emissions and noise pollution, as well as strong opposition from airlines unwilling to foot the bill.
Heathrow’s landing charges, which are regulated by the CAA, are already among the highest globally and are passed on to passengers through ticket prices. The cost of the third runway—originally estimated at £14 billion in 2014 but now expected to be significantly higher—will likely be recovered through further fee hikes.
“If Heathrow is to expand and build a third runway, it cannot continue to gold-plate its construction costs and spend inefficiently,” Gallego and Weiss cautioned.
The CAA and Heathrow have yet to formally respond, though a source at the airport indicated that Heathrow intends to propose an alternative long-term regulatory framework. They added: “It makes little sense to suggest that passengers will have new runways and terminal buildings for free.”
Read more:
Airlines demand urgent review of Heathrow’s costs before third runway approval