The cost of a family summer holiday could soar by up to £100 next year due to Heathrow airport’s ‘outrageous’ price hikes, former British Airways boss Willie Walsh warned last night.
Heathrow, which is owned by a consortium of billionaire investors, wants to increase the charges airlines pay to use the airport by more than 90 per cent from January – from £19.36 to £37.63.
Airlines add these charges to ticket prices, meaning a family of five could pay almost £100 more for flights from Heathrow if the proposal gets the green light from the Civil Aviation Authority regulator in the coming days.
Mr Walsh accused Heathrow of acting like a ‘greedy monopoly’ and said its wealthy shareholders must ‘step up’ to provide investment after years of generous dividend payouts.
The Irishman, who now runs the International Air Transport Association trade body, has joined BA and Virgin Atlantic in lobbying the regulator to block the price hikes.
Mr Walsh said: ‘Heathrow must understand that gouging its customers is not the road to recovery for itself, the airlines, travel and tourism jobs, or travellers.
‘I have sympathy for some airports, but looking for a 90 per cent increase, I just find that outrageous. There is simply no justification for that, and the only reason they are doing that is because they believe they can.
‘Instead, it’s time for Heathrow’s shareholders to invest. The recovery of the UK’s travel and tourism industry impacts millions of jobs. They cannot be held hostage to the intransigence of what is effectively a greedy monopoly hub airport.’
Heathrow’s seven billionaire owners include the sovereign wealth funds of Qatar, Singapore and China.
It has paid out about £4 billion in dividends since 2012 and has said it could restart payouts next year, after pausing them over the pandemic, if its debts come under control.
Heathrow bases its charges on the numbers using the airport. It expects around 40 million passengers next year, compared to 80 million before the pandemic, and said this means each passenger must pay more to cover the shortfall.
Company documents show Heathrow could raise £1.6 billion from airport charges next year, to offset Covid losses of £2.9 billion.
A Heathrow spokesman said: ‘We’ve proposed a balanced increase of 4 per cent to the average airfare, which will allow us to continue targeted investment in the airport’s resilience and to maintain basic service standards.’
But Mr Walsh said: ‘I am critical of any airport who believes they have the right to significantly increase charges at this time to recover money they didn’t get because of coronavirus.
‘You can imagine if an airline tried to say ‘you owe us money because you didn’t fly with us in 2020′ – they’d be laughed out of court.’
BA chief executive Sean Doyle and Virgin Atlantic executives are in talks with the CAA about Heathrow’s proposals.
They say passengers travelling from Heathrow pay the highest charges in the world and the planned 90 per cent increase outstrips proposed hikes of between 2 and 9 per cent at airports such as Paris and Frankfurt.
Luis Gallego, chief executive of BA owner IAG, said: ‘Doubling charges at Heathrow, which is already the world’s most expensive hub airport, will thwart our industry’s ability to support the recovery of UK businesses.’
Corneel Koster, chief operating officer at Virgin Atlantic, said: ‘Heathrow is prioritising its shareholders at the expense of airlines and consumers. Just as UK airlines have raised significant funds from shareholders to weather the pandemic, it’s only right that Heathrow turns to its owners first.’
We’re all sick to death of Zoom… we’d much rather zoom off to meet people face-to-face: WILLIE WALSH says Boris Johnson must help the airline industry by ending the testing rip-off
By WILLIE WALSH, Director General of the International Air Transport Association
The travel restrictions caused by the pandemic have had a catastrophic impact on our ability to connect with families, friends, or for business.
Globally, air travel collapsed more than 90 per cent at the height of the crisis, and the UK was one of the worst-hit countries.
As an island, the UK depends on air transport to connect to the world. When the borders were closed, and expensive testing and quarantine requirements were put in place, everyone in the UK suffered – jobs and businesses in the economy, but also the mental health and wellbeing of millions of people who were denied the chance to visit family and friends abroad, or who were just desperate for a holiday in the sun.
In the circumstances, we were all forced to rely on digital substitutes: Zoom, Skype, Teams, FaceTime and so on. We had no choice but to use these options because real face- to-face contact was impossible.
So I suppose we should be grateful that the technology exists to at least give us a certain level of interaction during this terrible pandemic.
But I am sure I am not the only person who, nearly two years into this crisis, has had enough of virtual meetings. Spare us from another Zoom family quiz!
And as a business tool, we’re all fed up with the same problems that occur time and again. People stuck in the ‘waiting room’ because someone forgot to let them in. Squinting at a tiny presentation on a screen. Yelling at the guy who always forgets to take himself off mute.
We’ve all probably got to the point where we cheer when the connection goes down.
The collapse in travel has tested to destruction the prophecies of many so-called ‘futurologists’ that such technologies would render travel obsolete.
When I was running British Airways, I was always being told that soon a lot of flying would be killed off by video calls. I think our experience of virtual meetings over the last two years has shown us the opposite: that there is no substitute for a real meeting.
I attended a conference in Dublin last Tuesday, the first international conference held in Ireland since the start of the pandemic. Eight hundred people were there.
These were people who had been doing business over Zoom and Teams, and they couldn’t wait to get back to meeting face to face. We had 600 people at the IATA annual meeting in Boston earlier this month – and there was the same attitude.
The value of face-to-face interaction is far superior to anything technology allows us to do. Gathering together, hugging a loved one, shaking the hand of a colleague or a client – these things cannot, and will never, be matched by ones and zeros floating down a fibre-optic cable.
As we emerge from the worst of Covid-19, our society faces numerous challenges. But there’s one thing I am sure of: people will still want to travel. Expats will still want to visit home.
Holidaymakers will still want to explore abroad. Conference delegates will still want to network. Deal-makers will still want to read the body language of their opposite numbers.
We’ve got proof of this. Every time a country is taken off the UK red list, bookings to that country spike. The latest example is the United States.
At last, the White House has given the go ahead for vaccinated travellers to visit from November 8. It’s great news. Bookings from Europe to the US jumped 250 per cent when the opening was just hinted at last month.
Given a chance, travel – and much-needed jobs – will bounce back. But it will need help.
The UK used to be the world’s number three aviation market. Only the US and China carried more passengers. And that traffic supported over one million jobs. That is a testament not only to the adventurous British public, but also to the professionalism and excellence of the UK aviation sector.
Successive UK governments have consistently taken this success for granted. They’ve treated airlines as a cash cow, raising billions in air taxes.
They’ve allowed the country’s principal air gateway, Heathrow, to gouge its customers, providing massive returns to its shareholders while making it the most expensive airport in the world to do business.
But the pandemic has shown that this complacent attitude towards one of Britain’s few undoubted business success stories cannot continue.
Key EU competitors have overtaken Britain in many respects, whether in the size of their airlines, the number of routes served, the flexible response to the pandemic, or their competitive cost base. The British people and the British economy are set to pay a price for this Government neglect.
It is not too late. The UK still has a strong base to rebuild. But it will need the Government and Civil Service to take aviation seriously as a strategic asset for Britain.
Consider the environment. Airlines recently committed to achieving net-zero carbon emissions by 2050, giving the opportunity of green flights for all. But to achieve that, we need much more sustainable aviation fuel to be made.
The Biden administration is incentivising the production of at least 11 billion litres of sustainable aviation fuel by 2030. This is leadership. It comes in stark contrast to the EU ReFuel initiative, which imposes mandates but provides no incentives to achieve them.
And we need the aircraft manufacturers to develop clean electric and hydrogen planes. The Government can help to encourage that investment. Diverting, say, £1 billion of air passenger duty would be a big help.
Government can also get serious in making Heathrow’s shareholders share the pain the rest of us have felt in the pandemic.
They are looking to make back the money they lost in the past couple of years, not by reducing their dividends or making efficiency savings, but by increasing landing fees by 90 per cent. That means a typical family travelling through Heathrow could be paying some £100 more. Only a monopoly could behave like this.
Most urgently of all, the Government has to get a grip on the pandemic restrictions. Getting rid of PCR tests for vaccinated travellers this month will be a welcome step. Simplifying the ridiculous traffic-light system and reducing the number of red list countries is also good news.
But the same mistakes that led to the UK having the most expensive PCR tests in the world are being repeated with the move to antigen tests. You can pick these up in Europe for €5 on the high street.
But in the UK, the state-sponsored rip-off will continue, with tests costing £35, available only from a closed shop of providers. It’s not good enough.
Between February and August, the PCR test positivity rate of arriving passengers to the UK was one per cent, and the positivity rate from testing the general population was seven per cent. So we can confidently say travel is not increasing the UK’s Covid-19 risk.
We’re all sick of Zoom. We’d much rather zoom off to visit people in person. But getting back those jobs, those air routes and those opportunities won’t happen by magic.
The Government shut down air travel – now we’re going to need Government support to ensure Britain flies higher in the future.