Heathrow third runway warning from airlines as they slam ‘quality of service'

Yahoo

20-03-2025

Airlines have raised concerns over Heathrow's third runway plans as they believe its effectiveness as a hub airport is hampered by the way it is run.
Some 90% of respondents to a survey of 50 carriers which use the west London airport agreed with the assertion. The standard of services and a lack of engagement were among the reasons cited by airlines for why they believe Heathrow's capability is hindered.
Heathrow 's Airline Operators Committee (AOC), which represents the airport's airlines and commissioned the research, said it shows a third runway would be 'unaffordable' under the current system.
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In response, the airport said it agrees that 'adjustments to the regulatory model are needed', but insisted 'airlines and passengers get good value for money'. More than two out of three (67%) airlines agreed that the airport's operation stifles their ability to increase investment.
Some 60% of respondents believe Heathrow's service levels inside terminals is worse than at other major airports, with claims of long security lines, baggage system failures and poor treatment of passengers with restricted mobility.
Chancellor Rachel Reeves gave her backing for Heathrow's third runway project in a speech on growth in January. The airport responded by saying it would submit detailed plans to the Government in the summer. The cost of the project was estimated at £14 billion in 2014, but this is likely to have risen sharply.
Heathrow's AOC is part of the Heathrow Reimagined campaign, which is calling on the Civil Aviation Authority (CAA) to reform how the airport is regulated.
Among the other organisations represented by the body are British Airways' owner International Airlines Group (IAG), Virgin Atlantic and tycoon Surinder Arora, who operates a number of hotels serving the airport.
The campaign claims Heathrow is the world's most expensive airport for charges, with airlines paying £1.1 billion more each year than if fees were in line with equivalent major European airports.
Airlines typically pass charges on to passengers through fares. Nigel Wicking, chief executive of Heathrow's AOC, told the PA news agency the results of the survey reflect 'the performance challenges airlines have day to day at Heathrow'.
He said: 'When you when you look at that relative to the amount we spend at Heathrow, something's going wrong. We're spending a lot of money, it is the most expensive airport for charges, and yet the quality of service keeps on dropping, whether that's loss of bags, congestion or lack of availability of check-in space.'
He said New York's JFK airport offers a 'far better experience' because it has refreshed all its terminals within a 27-year period, whereas at Heathrow, Terminal 3 is more than 60 years old and Terminal 4 is nearly 40 years old.
The regulatory asset base (Rab) model used at Heathrow allows it to charge fees to airlines based on infrastructure improvement plans agreed with the CAA and permitted rates of return for investors.
Mr Wicking said: 'They've realised what they're sitting on in terms of the asset that is Heathrow, and with the regulatory model they've worked out how to make really good money.
'If they can get money onto the Rab – if they get capital spend – they will have a really good return on that capital spend, which is obviously very attractive to their shareholders but it doesn't drive efficiency.
'Whenever I see an another capital plan coming across my table for Heathrow to invest in, I just look to the skies and think 'where do you get these numbers from' because some of them are absolutely ludicrous.'
He added: 'The (airlines) do want expansion but it cannot be at any price.
'The current price is already too much. If you extrapolate that to the kind of spend we're talking about for a third runway and terminals, it would just make it unaffordable.' Heathrow reported pre-tax profits of £917 million for 2024, up 31% from £701 million in 2023.
In December 2024, French company Ardian completed a deal to become Heathrow's largest shareholder with a 23% stake, while Saudi Arabia's sovereign wealth fund purchased a 15% share.
Mr Arora claimed Heathrow bosses 'take advantage of the monopoly' position as the UK's only major hub airport. He gave examples – disputed by Heathrow – of the airport charging airlines £76,000 to remove three trees, spending £1.1 million on a smoking shelter at Terminal 4, and charging more than half a million each for two disabled toilets.
He said: 'We are 110% behind the Chancellor and the Government for expansion, for growth, except just a couple of caveats.
'We must do it for the right reasons, and we must do it for the benefit of the nation, and not for the benefit of lining the shareholders' pockets. We must make sure that we get value for money.'
A spokesperson for Heathrow said: 'Every penny invested in infrastructure at Heathrow is approved by airlines and our regulator.
'We agree adjustments to the regulatory model are needed to deliver a third runway, but airlines and passengers get good value for money at Heathrow.
Our operational performance is good and improving, and the value we provide to airlines and passengers is easily seen by how many airlines want to include Heathrow in their network.
'Expanding Heathrow will drive a further step change and address many of the challenges identified with operating an airport that is already at full capacity.'
Heathrow recorded a 6% rise in the number of passengers travelling through its four terminals last year, to 83.9 million.
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