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| Heathrow third runway unjustifiable, says BA parent company boss | Heathrow third runway unjustifiable, says BA parent company boss |
| (about 2 hours later) | |
| Heathrow’s biggest customer, the group that owns British Airways, has dealt a stinging blow to the airport’s expansion hopes by saying the £17.6bn price for a third runway is excessive and “cannot be justified on any basis”. | |
| Willie Walsh, the chief executive of BA’s parent company IAG, warned that his airlines would not pay the outrageous cost for new infrastructure that he called “inefficient and not fit for purpose”. | Willie Walsh, the chief executive of BA’s parent company IAG, warned that his airlines would not pay the outrageous cost for new infrastructure that he called “inefficient and not fit for purpose”. |
| Walsh said that both the Airports Commission, which in early July recommended to the government that a third runway be built, and Heathrow had “glossed over their ability to finance this”. | Walsh said that both the Airports Commission, which in early July recommended to the government that a third runway be built, and Heathrow had “glossed over their ability to finance this”. |
| Walsh, who has been a prominent backer of a third runway in the past, warned that IAG would refuse to pay the charges that would be needed to make the runway commercially viable, with aeronautical charges forecast to rise to £28-£30 per passenger on average. He added that the group would “consider what to do with our airlines”, which will shortly include Aer Lingus as well as Iberia, Vueling and BA. | |
| Walsh said: “The infrastructure is not fit for purpose. The price tag is excessive and cannot be justified on any basis. We didn’t ask for it and we’re not paying for it.” | Walsh said: “The infrastructure is not fit for purpose. The price tag is excessive and cannot be justified on any basis. We didn’t ask for it and we’re not paying for it.” |
| “Ultimately it’s airline customers that will pay the price and I don’t get any calls from customers asking to put the fares up.” | “Ultimately it’s airline customers that will pay the price and I don’t get any calls from customers asking to put the fares up.” |
| He expressed doubts that the government would back the Davies commission’s recommendation, but that even if it did, Heathrow expansion would be far from a done deal. | He expressed doubts that the government would back the Davies commission’s recommendation, but that even if it did, Heathrow expansion would be far from a done deal. |
| Walsh said: “I think the prime minister is going to struggle to do a u-turn on comments he made before the 2010 election” – when David Cameron said “no ifs, no buts” ruling out a third runway. | Walsh said: “I think the prime minister is going to struggle to do a u-turn on comments he made before the 2010 election” – when David Cameron said “no ifs, no buts” ruling out a third runway. |
| “The questions that need to be asked haven’t been addressed,” said Walsh. “If it does receive political support, it still has a big challenge to be addressed in terms of financing. | “The questions that need to be asked haven’t been addressed,” said Walsh. “If it does receive political support, it still has a big challenge to be addressed in terms of financing. |
| “This issue of financing was glossed over and was put in there as if it was a done deal... The debate hasn’t really started yet.” | “This issue of financing was glossed over and was put in there as if it was a done deal... The debate hasn’t really started yet.” |
| Walsh said IAG currently pays Heathrow around £800m to £900m annually and would not countenance higher charges that would raise that bill by 50%. | Walsh said IAG currently pays Heathrow around £800m to £900m annually and would not countenance higher charges that would raise that bill by 50%. |
| He said that if he was the chief executive of Heathrow, where BA alone now has 51% of the landing slots and the enlarged IAG will soon have 56%: “I’d be concerned about my ability to finance this project.” | He said that if he was the chief executive of Heathrow, where BA alone now has 51% of the landing slots and the enlarged IAG will soon have 56%: “I’d be concerned about my ability to finance this project.” |
| Gatwick, which was shortlisted but eventually ruled out as an option for expansion by the commission led by Sir Howard Davies, said Walsh’s comments showed the report was unravelling fast. Gatwick’s chief executive, Stewart Wingate, said: “It is no surprise British Airways have come out today against expansion. For the huge costs of a third runway at Heathrow you could build Gatwick, have all the benefits and billions left to invest around the country.” | Gatwick, which was shortlisted but eventually ruled out as an option for expansion by the commission led by Sir Howard Davies, said Walsh’s comments showed the report was unravelling fast. Gatwick’s chief executive, Stewart Wingate, said: “It is no surprise British Airways have come out today against expansion. For the huge costs of a third runway at Heathrow you could build Gatwick, have all the benefits and billions left to invest around the country.” |
| However, Walsh labelled Gatwick as confused, adding: “They seem to think that some pot of money could fund a runway at either Heathrow or Gatwick. I’ve made clear that I see no business case for Gatwick ... the case that they’ve put forward doesn’t stand up to any level of scrutiny.” | However, Walsh labelled Gatwick as confused, adding: “They seem to think that some pot of money could fund a runway at either Heathrow or Gatwick. I’ve made clear that I see no business case for Gatwick ... the case that they’ve put forward doesn’t stand up to any level of scrutiny.” |
| Heathrow rejected Walsh’s comments, saying: “The Airports Commission has confirmed that expansion can be financed and with low-cost airlines such as easyJet already committing to provide routes from Heathrow, it is clear that operating costs from the airport will be competitive.” | Heathrow rejected Walsh’s comments, saying: “The Airports Commission has confirmed that expansion can be financed and with low-cost airlines such as easyJet already committing to provide routes from Heathrow, it is clear that operating costs from the airport will be competitive.” |
| A spokesperson added: “Heathrow expansion is critical to the future of the British economy. It is the only way the whole nation will be connected to all of global growth.” | A spokesperson added: “Heathrow expansion is critical to the future of the British economy. It is the only way the whole nation will be connected to all of global growth.” |
| Meanwhile, IAG confirmed that its takeover of Aer Lingus was near completion with 62% of shareholders having accepted their offer, excluding Ryanair, which has committed to sell its 30% share in the Irish airline. | Meanwhile, IAG confirmed that its takeover of Aer Lingus was near completion with 62% of shareholders having accepted their offer, excluding Ryanair, which has committed to sell its 30% share in the Irish airline. |
| The group announced profits after tax of of €332m (£234m) for the first six months of 2015 – more than three times the profits for the same period last year. | The group announced profits after tax of of €332m (£234m) for the first six months of 2015 – more than three times the profits for the same period last year. |