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Willie Walsh says new Gatwick runway has ‘no business case’

UK airports

Willie Walsh says new Gatwick runway has ‘no business case’

Fear that landing fees levied on airlines will rise significantly

Willie Walsh, chief executive of IAG © Bloomberg

Willie Walsh, the chief executive of British Airways parent IAG, said on Friday there was “no business case” for building an additional runway at Gatwick but declined to back either of the proposals to expand its rival Heathrow.

The head of the UK’s dominant carrier said he would only endorse a plan if airlines would not have to pay higher landing fees to fund any capacity expansion.

Echoing comments he made to MPs on the Commons transport committee two years ago, Mr Walsh said it appeared that landing fees levied on airlines would rise significantly to fund an additional runway at Gatwick.

“I’m not going to support an additional runway at Gatwick because I don’t think there’s a business case for it,” he told journalists after announcing IAG’s latest financial results. “There is capacity available at Gatwick. I can’t see what’s going to make it attractive.”

The Airports Commission, chaired by Sir Howard Davies, is due to make a recommendation on airport expansion next summer, after the general election. The three options it has shortlisted are an extra runway at Gatwick, an extra runway at Heathrow and doubling the length of one of Heathrow’s existing runways. The commission is due to publish its final appraisals in the coming weeks.

Mr Walsh said his rejection of Gatwick did not mean he was endorsing an additional runway at Heathrow, where he said the charges were already too high. “I’m not going to support anything that sees our charges at Gatwick or Heathrow rise,” he said. “So if they want to get our support, they are going to have to show us that charges won’t rise, and I haven’t seen that yet.”

This month Mr Walsh said he was not confident politicians would “be brave enough” to authorise expanding either airport.

Gatwick, which said its bid had been endorsed by carriers including Norwegian, Vietnam Airlines and Thomas Cook, rejected Mr Walsh’s arguments. “Demand is strong and we are close to full capacity today,” a spokesperson said. “Airlines and passengers are voting with their feet, and Gatwick is the fastest-growing airport in London, as our monthly traffic figures underline.”

The airport added that “building a second runway at Gatwick will be cheaper than expanding Heathrow and those savings will be passed on to passengers, who increasingly want affordable flying”.

Heathrow, which has won backing from many big carriers – most recently Japan’s All Nippon Airways– said any expansion scheme “must be commercially viable for airlines” but it did not rule out raising charges.

“Heathrow is committed to working with airlines to minimise cost and provide a tariff path that is affordable,” the airport said. “We have a strong business case with demand for slots outstripping supply.”

Heathrow argues it is virtually full, but if it is awarded an additional runway its capacity would increase from 485,000 flights a year to 740,000 and annual passenger numbers would rise from about 70m to 130m.

Gatwick, in contrast, believes that awarding it a new runway would give London two world class airports, resulting in more competition and choice as well as lower fares.

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