British Airways threatens to cut Heathrow flights if airport increases charges

British Airways says it will consider reducing the number of flights it operates in and out of Heathrow Airport, west London, if proposed increases in charges are implemented.

The UK’s busiest airport could increase fees per passenger by up to 76 per cent under plans drawn up by the Civil Aviation Authority (CAA).

The airline’s parent company IAG said Heathrow is already among the most expensive airports in the world to use and it is becoming “more and more expensive”.

Luis Gallego, chief executive of IAG, warned of a possible scaling back of flights if there was an increase in charges, which are paid by airlines but generally trickle down to passengers in air fares.

“The reality is that more than 40 per cent of the people who use Heathrow are connecting passengers,” he told the Airlines 2021 conference in Westminster. “They are simply passing through on their way to other destinations and could easily go by other, more competitive hubs.

“Hiking charges will not help. It will not attract demand – it will have the opposite effect.

“If the rise in landing charges goes ahead, I know IAG will not be alone in reconsidering our airlines’ use of Heathrow.”

His warning comes just weeks after the CAA announced a plan to raise the cap on Heathrow’s average charge per passenger from the current level of £19.60 ($26.34) to between £24.50 and £34.40.

Mr Gallego said Heathrow gives the UK’s aviation sector a “major advantage”, but that “we need to attract demand to stay competitive”.

Before the Covid-19 pandemic hit, BA was operating flights from Heathrow to more than 130 destinations.

The grounding of flights dealt a massive blow to the aviation industry and bosses have criticised governments for subsequent quarantine and testing requirements, which they say are holding airlines back from returning to normal.

After the crisis hit, the UK’s largest international airline laid off about 10,000 staff members.

It recently said it would rehire an unspecified number, reportedly about 3,000, of cabin crew ahead of an expected increase in demand for flights next summer.

Also speaking at the Airlines 2021 conference, Tim Alderslade, chief executive of trade body Airlines UK, was equally critical of plans to increase charges at Heathrow.

He said that the level of Heathrow’s fees threatens the viability of its expansion project.

Under the CAA’s proposals, Heathrow’s exact charge will depend on factors such as passenger demand and commercial revenue, with prices higher if the airport continues to struggle in those areas.

The range is planned to come in effect from summer 2022, with an interim cap of £30 being considered.

Heathrow had called for the cap to range from £32 to £43 for the five-year period being consulted on.

The airport said last month that its losses from the Covid-19 pandemic had hit £3.4 billion and passenger numbers in October were 56 per cent down on pre-pandemic levels.

“Their inability to keep their charges under control will be the death of runway three,” Mr Alderslade said, referring to the airport’s plan to expand its capacity by building a third runway.

The project was given the green light in 2016 but construction has yet to begin.

John Holland-Kaye, chief executive of Heathrow, said he estimates it will take “10 to 15 years” for the runway to be completed.