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Give CAA power to control Heathrow expansion costs

The Transport Select Committee should ensure the Civil Aviation Authority (CAA) is given powers to force Heathrow Airport Ltd (HAL) to introduce competition as it expands, says International Airlines Group (IAG).

Willie Walsh, IAG’s chief executive, will stress the Group’s concern when he addresses the Committee tomorrow (February 20).

HAL is engaged in intense lobbying to be designated as the sole promotor of terminals in the Government’s National Policy Statement (NPS). IAG believes that in the interests of competition and consumers, this should be resisted.

The Government had an opportunity to open up Heathrow’s terminals to competition in the Aviation Act 2012 but failed to do so. In IAG’s view, the NPS provides the perfect opportunity to remedy that failure and say explicitly that other operators can run terminals and that the CAA can enforce this.

Willie Walsh said: “We’re calling on the Transport Select Committee to ensure the CAA has the necessary power to act in consumers’ interests. It must be able to force Heathrow to let other parties design, build and run commercial facilities like terminals if it’s required to improve competition and keep costs down.

“It’s outrageous if the Government enshrines HAL as the sole provider of expansion. Heathrow’s cost proposals are still excessive and incredibly vague. There is no breakdown beyond the overall cost of £14 billion – it hasn’t even said how much it will cost to move the M25. The true costs are being hidden and will only be revealed after Parliament votes on the NPS later this year. By then it will be too late. Heathrow will effectively have carte blanche to increase overall costs.

“If the CAA cannot force competition now, it will be further weakened in the face of an unstoppable monopoly with a green light from Government. We want the CAA to have go/no-go power to ensure that there is proper cost control and that any overspend is entirely at HAL’s risk and not picked from customers’ pockets”.

February 19, 2018 IAG08