The parent company of British Airways and Iberia says it has “absolutely no confidence” in the ability of Heathrow Airport (LHR) to deliver a cost-effective expansion of the West London airport. There have been plans in the works for years to expand Heathrow by building a third runway and additional terminal buildings but the massive project has faced fierce opposition from lawmakers, environmentalists, local residents and even the airlines that call the airport their home.
International Consolidated Airlines Group (IAG), has long been critical of Heathrow’s plans and is particulary unhappy with the rising costs that will likely see higher charges for both passengers and airlines to fund the expansion. Under Heathrow’s current plans, a third runway would hopefully be completed by 2026 but construction will require building the runway over the UK’s busiest motorway.
The no-nonsense speaking chief executive of IAG, Willie Walsh claims initial planning and construction costs have risen by around 250 per cent in just two years – jumping from £915 million to a price tag valued at £3.3 billion.
“Advance costs are spiralling out of control and total expansion costs are being covered up. This latest development proves beyond doubt that Heathrow can’t be trusted,” Walsh said in a submission to the UK’s Civil Aviation Authority.
“Heathrow’s on a massive gravy train and will do everything to protect that. We have absolutely no confidence in its ability to deliver cost-effective expansion,” Walsh continued.
Some critics, however, question IAG’s motives for being so outspoken about Heathrow’s expansion plans. British Airways currently holds a virtual monopoly at the airport and this lucrative position could be jeopardised when a third runway opens. The airport is currently operating at capacity, meaning that rivals have limited scope to compete against British Airways.
Heathrow has long signalled that additional slots created by a third runway would be given to new players to increase competition and choice.
But there is some cause for concern – total construction costs could run as high as £32 billion, and a cheaper alternative plan has been outright rejected by the airport. Of course, there’s still no certainty that Heathrow will ever be given the green light to even start construction.