BA Owner Slams Spiraling Costs of Heathrow's Third Runway
IAG, the parent company of British Airways, hit out Wednesday at the spiraling costs linked to the controversial construction of a third runway at London Heathrow, Europe's busiest airport.
In a submission to Britain's Civil Aviation Authority, IAG accused Heathrow of trying to cover up the real costs and passing on the burden to airlines and, in turn, to passengers.
"Advance costs are spiraling out of control and total expansion costs are being covered up," IAG chief executive Willie Walsh said in a statement.
IAG said the airport had originally put the cost of the expansion -- both of the runway and the additional terminal and aircraft stand capacity -- at £14 billion (15.3 billion euros, $17 billion).
"However, its latest masterplan says that now only builds the runway. The total cost is £32 billion," the statement said.
“The airport's chief executive thinks expansion is a 'fait accompli' but with judicial, environmental and political hurdles ahead, there's no guarantee," Walsh said.
"Spending £3.3 billion before receiving planning permission is irresponsible and it's completely unacceptable to expect passengers to pick up the tab."
IAG said it had "no confidence in Heathrow's ability to deliver cost-effective expansion."
And its "submission urges the CAA to regulate Heathrow effectively and stop the airport from steamrolling through massive cost increases".
Britain's government last year finally approved the third runway after decades of acrimonious debate.
In June, the airport published its plans, including the re-routing of rivers and roads as it sought to allay environmental concerns.
Construction is expected to start in 2022, with the runway built by around 2026. New terminals will not be ready until about 2050.
The hub, west of London, aims to increase its total capacity to 130 million passengers per day, compared with the current level of about 78 million.
London Mayor Sadiq Khan, along with environmental charities and local councils, recently lost a court battle to prevent the Heathrow expansion.
Britain's Conservative government argues that the project will provide a major boost to Britain's post-Brexit economy and could create up to 114,000 local jobs by 2030.