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IAG: ‘Break up Heathrow’s monopoly’

BA owner IAG has called on the CAA to allow third parties to run terminals at Heathrow

International Airlines Group (IAG), owner of British Airways, has submitted a proposal to the Civil Aviation Authority (CAA) to break up Heathrow’s ‘monopoly’ and allow third parties to run terminals at the airport.

IAG – one of the airport's biggest customers – says Heathrow’s expansion “provides a great opportunity for independent companies to design, build and run commercial facilities like terminals”. It claims competition would benefit passengers with better facilities at lower prices to keep customer charges from rising to pay for new infrastructure.

The group claims Heathrow’s investment is currently funded by debt and that “diverse sources of capital” would reduce risk and lower capital costs. It criticised the government’s National Policy Statement, saying the 92-page document only contained three lines of copy about costs “despite the price tag being critical to the development’s success.”

Willie Walsh, CEO of IAG, said: “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.

“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. 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.”

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