IATA has welcomed the UK Transport Select Committee’s endorsement of Heathrow as the right location to expand the UK’s airport capacity, but gave a stark warning on spiralling costs.

Heathrow expansion

“The airline community supports Heathrow as the right location to expand airport capacity,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe, “but has two overriding concerns: affordability, and operational flexibility. Both are jeopardized by the current plans from Heathrow’s owners.

“The Select Committee’s recommendations on cost control should be essential reading for the government, for Heathrow Airport Holdings Ltd (HAL), and anyone with a stake in the future of air transport in the UK. At the moment, we are looking at extra capacity in the right place, but at the wrong price.”

IATA also welcomed the Committee’s recommendations that the government consider giving the Civil Aviation Authority greater powers to regulate Heathrow’s passenger and airline charges, and that these charges be held flat in real terms.

We need guarantees regarding how costs will be managed, especially if key risks are not known at this stage

With Heathrow airport charges the highest in the world, IATA said any expansion must also come with a commitment that charges wouldn’t rise from the current level.

“We welcome the Committee’s recommendation that charges should be held flat. And we share the Committee’s concerns on the effects of an increase in charges. An unaffordable Heathrow will have a detrimental impact on the competitiveness of the UK's only hub airport in comparison to rivals in France, Germany and Netherlands,” said Schvartzman.

He added that costs for constructing the new runway could spiral out of control. “HAL have suggested a cost in the region of £14-17 billion ($20-24 billion) to build the third runway—around double the price of the London Olympics,” said Schvartzman. 

He noted that the Select Committee said the estimates were optimistic, and HAL were not clear on the funding of crucial works such as the proposed bridging of the M25 and the relevant surface access schemes. “The only way these concerns can be addressed is to ensure that there is much greater transparency on the costs of construction. Heathrow is a facility that benefits the entire nation—it is too important not to be under careful oversight,” said Schvartzman.