British Airways owner IAG calls for "Heathrow monopoly" to be broken up to boost competition and cut costs

Rebecca Smith
Heathrow says it has become
Heathrow says it has become "increasingly confident" of meeting the government's affordability challenge on expansion (Source: Heathrow)

The boss of British Airways owner IAG has today called for Heathrow's "monopoly" to be broken up so its terminals can be run by third parties in order to stimulate competition.

The airport's biggest customer has been vocal in its criticisms of plans for a third runway at Heathrow, with IAG chief executive Willie Walsh saying last month a detailed breakdown of costs was needed to ensure customers are not "ripped off".

Now, in a new submission to the Civil Aviation Authority, IAG said that Heathrow's expansion provides an opportunity for independent companies to design, build and run commercial facilities like terminals. It added that competition would also ensure customer charges do not rise to pay for new infrastructure.

Read more: TfL sounds alarm over public transport crowding from Heathrow expansion

IAG said it would also generate better financing options for new infrastructure providing greater transparency and lower risk.

Walsh said today:

Heathrow’s had it too good for too long and the government must confirm the CAA’s powers to introduce this type of competition. This would cut costs, diversify funding and ensure developments are completed on time, leading to a win-win for customers.

The IAG boss said his proposal would also ensure Heathrow "continues to focus on cost control, something it has been reluctant to do in the past".

Heathrow pointed to JFK airport, saying its terminals are operated by different airlines.

"Anyone who has had the misfortune of connecting through JFK airport will know this is not a passenger experience we should seek to replicate at Heathrow," a spokesperson for the airport said, adding that it was "against the interests of our passengers" to have one dominant airline.

The airport has launched a consultation on its proposals, as it seeks to slash £2.5bn off expansion, taking the overall cost down to £14bn. Heathrow said it developed the plans in "close cooperation" with airlines and would ensure Heathrow expands with airport charges staying close to current levels.

The call comes with Heathrow bosses facing questions from MPs today over expansion plans for the airport, in the latest evidence session on the government's airports national policy statement.

Heathrow's chief executive John Holland-Kaye and the airport's executive director for expansion will appear before the Transport Select Committee today, with transport secretary Chris Grayling facing MPs on the matter on Wednesday.

Read more: Heathrow says Gatwick shouldn't automatically be next in line for expansion

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