Virgin mulls legal action over Heathrow disruption

City A.M. Reporter
Virgin Atlantic may take legal action against airport operator BAA over the part closure of London's Heathrow airport last month and will withhold fees until a probe into the disruption is complete.

"We're exploring our legal options but will continue talking to BAA and want the inquiry into what happened last month to be both independent and robust," Virgin Atlantic spokesman Greg Dawson told Reuters.

Heavy snowfall paralysed BAA's Heathrow airport late last month, leading to a spate of flight cancellations after its second runway was closed due to bad weather.

Virgin Atlantic also said it would stop paying landing and parking charges at Heathrow until BAA explains why a day's snowfall left thousands of air passengers stranded in the week before Christmas.

Virgin plans to withhold bills from 1 January until it sees the results of an internal BAA inquiry – headed by non-executive director Prof David Begg – into the disruption, due to be published in March.

"We have written to BAA this weekend to advise them that we are withholding our fees from the airport operator until its inquiry into the snow enforced runway closures in December is completed," Virgin Atlantic said in a statement.

"Despite the airport operating conditions being way beyond our control, Virgin Atlantic is taking responsibility by paying out millions to customers that suffered disruption to their Christmas travel plans."

Payments withheld by Virgin, which are dependent on its aircraft's movements at Heathrow, would likely be less than £10m for the period between January and March, an aviation source said.

"We will work with airlines during the Begg enquiry. Meanwhile Heathrow's conditions of use do not provide any basis for Virgin Atlantic or any other airline to withhold airport charges," a BAA spokesman told Reuters.

Ferrovial-owned BAA could legally seize Virgin aircraft for repeated failure to pay its bills but has not yet considered this option.

Other major airports were closed by snow before an after the over the Christmas holiday period, including Germany's Frankfurt and New York's JFK airport.

"We're not withholding fees anywhere else. JFK is not an issue for us at the moment – it was a 24 hour thing," Virgin's spokesman said.

British Airways last month said it expected to take a £50m hit from the disruption in its third quarter, while BMI said it is also mulling its legal options against BAA.