Grayling challenges aviation industry to balance Heathrow expansion costs

Grayling challenges aviation industry to balance Heathrow expansion costs

Transport secretary Chris Grayling has challenged the aviation industry to develop solutions for expansion that provide value for money and benefit passengers.

In a speech to industry, the transport secretary set the standards for how Heathrow should collaborate with airlines on the costs and design of a third runway.

He reinforced his commitment to ensuring that the interests of current and future passengers are at the heart of any expansion at Heathrow.

Grayling said: “It’s important that airport expansion works for consumers and I want the interests of current and future airport users to shape the plans.

“It remains one of my fundamental priorities to deliver the ambition I set in 2016 – to keep airport charges as close as possible to current levels – so price increases are not passed on to airlines, and ultimately consumers.”

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Airlines welcomed the move, fearing high development costs for a new runway will be passed on to passengers.

Reacting to the speech, IAG chief executive Willie Walsh said: “The secretary of state’s challenge to Heathrow to keep expansion costs low and provide value-for-money for consumers could not be more stark.

“Chris Grayling understands that Britain needs cost-effective infrastructure to survive and thrive on a global stage post-Brexit.

“Heathrow is a monopoly with a history of gold-plating facilities and very high airport charges.

“Benchmarking its cost proposals against similar schemes is critical and very welcome.

“It is imperative that Heathrow provides a full, detailed cost breakdown for expansion before parliament votes on it this summer.

“Introducing competition to build and operate new terminals at the airport could drive costs down further.”

Walsh added: “While we believe the secretary of state’s desire to keep costs flat, unless his statement is pinned down in the National Policy Statement, Heathrow will ignore him.

“Its reputation and history is clear for everyone to see.

“A three runway Heathrow will be the most expensive hub airport in the world and the UK economy and consumers will suffer at the hands of a rapacious landlord.”

The government has launched a new commission for the independent aviation regulator, the CAA, to oversee engagement between Heathrow and airlines on a new runway.

These discussions will start in summer and if the plans proceed, will continue until the submission of a formal planning application by the airport.

The CAA will champion the interests of consumers during industry discussions and provide regular updates to government on Heathrow’s engagement with airlines and how passengers are set to benefit.

Tim Alderslade, chief executive of Airlines UK, said: “Airlines support expansion at Heathrow as it’s best placed to deliver the biggest gains to passengers and the wider economy.

“We’re pleased that the secretary of state is responding to airline concerns about the need to make expansion affordable for consumers.

“He is right to say that it is customers who must stand to gain from what is a once in a lifetime opportunity to transform our aviation connectivity.

“Expansion is paid for not by Heathrow but by airline customers in the form of charges and Heathrow must not increase these to pay for a disproportionately expensive scheme.”