British Airways owner hits out at Heathrow 'monopoly' on airport's terminals

The owner of British Airways is calling for an end to Heathrow's "monopoly" on the airport's terminals, saying competition between third operators would lower costs for passengers.

International Airlines Group (IAG) was responding to a consultation related to Heathrow's expansion, saying the development provides "a great opportunity" for independent firms to design, build and run commercial facilities at the airport, including terminals.

IAG chief executive Willie Walsh said: "Heathrow's had it too good for too long and the Government must confirm the CAA's (Civil Aviation Authority) 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."

He said the company's proposal will ensure Heathrow is focused on cost control, "something it has been reluctant to do in the past".

IAG claims that the move would also create a new source of funding for the airport's infrastructure projects, whereas its current investments are funded through debt.

"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," Mr Walsh said.

"There's absolutely no reason why this cannot happen at Heathrow."

Willie Walsh
Willie Walsh

The Department for Transport is due to publish final proposals for a third runway at Heathrow in the first half of the year for a vote in Parliament.

If the scheme is approved, the airport will submit a planning application after consulting local communities on detailed proposals.

It hopes to begin construction in early 2021, with the runway completed by the end of 2025.

The third runway was due to cost about £16.8 billion, but Heathrow claims it can complete the project for £14 billion.

Airlines have expressed concerns that landing charges could be hiked to help pay for the investment, but the airport insists that the landing charges - currently around £22 per passenger - will remain "close to today's levels".

Mr Walsh said that if airport charges fail to decrease after its completion, IAG would join other airlines in calling for a price cap.

"With more passengers and the introduction of internal competition, the airport's charges should go down," Mr Walsh added.

"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."