Campaign calls for changes to regulation of Heathrow

Above: Passengers standing outside Heathrow’s T5.
Image by Peter Titmuss / copyright Shutterstock

Called ‘Heathrow Reimagined: A Better Hub for Britain’, the campaign seeks to bring about a fundemental review of how the UK’s hub airport – the largest in Europe – is regulated, for the benefit of consumers, businesses and the UK economy. The campaign seeks to work with industry, Government and the CAA to achieve reform.
 
The campaign represents the first time these parties have come together, united in a shared view that the current regulatory model is not fit for purpose. It argues that Heathrow Airport Limited’s substantial market power has given it an incentive to spend inefficiently which means it has acted against the interest of both consumers and airlines. In the 15 years since the last major review into UK aviation by the Competition Commission, it says Heathrow has become the world’s most expensive airport, with passengers and airlines today paying £1.1 billion more each year than if charges were in line with equivalent major European airports. It asserts that instead of being a source of national pride, Heathrow has failed to modernise and in turn let down consumers, carriers and the British economy, has dropped out of Skytrax’s Top 20 airports for passenger experience and that some surveys label the airport as the “most stressful in Europe”.
 
In response to Heathrow’s declining experience and ageing infrastructure, coupled with expansion plans that will see passenger charges rise again, Heathrow Reimagined calls on the CAA to investigate what has gone wrong and to address the root causes before passengers and airlines are locked into higher charges for decades to come. To achieve this and to ensure future investment offers value for money, there must be wholesale reform, which is necessary and achievable without delaying spades in the ground for expansion.
 
Nigel Wicking, Chief Executive of Heathrow AOC, said: “Heathrow is rapidly falling behind other major airports around the globe both in facilities and service to airline customers, whilst having the unenviable accolade of being the most expensive for airport charges. This cannot continue. The airline community want to offer travellers, to and from the UK, a great experience through Heathrow and we want growth, also avoiding the disproportionate costs we too often see by Heathrow Airport Limited.”
 
Surinder Arora, Founder and Chairman of the Arora Group, said: “I have worked in and around Heathrow for several decades and have seen with my own eyes the decline in what used to be the world’s best airport. The current monopoly at Heathrow doesn’t only vastly overcharge passengers on aviation fees but also on their parking and a variety of other services as it continues to stand out as the most expensive airport in the world by a long way.
 
“We are delighted to be working with the airlines to ask the CAA to look more carefully at the regulatory issues which lead to such high prices and seize the opportunity for competition to improve Heathrow’s offer to passengers.
 
“This is critical for the future of the airport separately to the third runway debate – the regulatory landscape for Heathrow must change regardless.”
 
Luis Gallego, CEO of IAG (International Airlines Group), said: “As an international airline group, we compare the experience for passengers at Heathrow with other airports, and the experience does not match the cost.  We would like to work with the industry, the Government and the CAA and recommend an urgent review in to the regulatory system at Heathrow, to improve the affordability and experience for travellers, so that it can become a leading global airport once again.”
 
Shai Weiss, CEO of Virgin Atlantic, said: "The current regulatory model at London Heathrow is simply not fit for purpose and does not sufficiently constrain Heathrow’s monopoly power. Despite having the highest passenger charges in the world, Heathrow is failing consumers, airlines and the UK economy, with ageing facilities and a declining customer experience. The regulatory framework which governs Heathrow must be reformed and we call on the CAA to undertake a fundamental review.”
 
As part of its submission, Heathrow Reimagined highlights alternative international hubs that have realised the opportunity to stimulate growth in vastly more efficient ways, providing value for money. This includes new terminals at Barcelona, Frankfurt, Madrid and Munich all costing half or less, when adjusting for terminal size, than the upgrades to Heathrow Terminals 2 and 5.
 
Istanbul is developing a completely new airport with capacity for up to 200 million passengers for €12 billion, while New York JFK will open its New Terminal One in 2030, the centrepiece of a £15 billion airport wide transformation. In Singapore, Changi is creating a fifth passenger terminal and a third runway for an estimated £8 billion, boosting capacity by 50 million passengers.
 
Following the launch of Heathrow Reimagined and the Campaign’s joint submission to the CAA, it says it will now seek to actively engage with the wider industry and government to achieve its primary objective of fundamental reform that can serve as a first step towards delivering value for consumers, UK plc and the government’s growth agenda.