"An addiction to gold-plated costs": IATA Slams Heathrow's Expensive Expansion Plans
IATA backs the UK's Heathrow expansion goal but warns its "gold-plated" costs are "unaffordable." Director General Willie Walsh stated the political haste to build risks creating one of the world's most expensive airports.
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The International Air Transport Association (IATA) supports the UK Government's renewed commitment to expand Heathrow Airport (LHR), recognizing it as a key move to unlock economic growth and enhance global connectivity.
However, the association issued a strong warning regarding the project's costs. Willie Walsh, IATA's Director General, noted that while the goal of stimulating the economy is "spot on," the "political haste" to move forward could handicap the UK in the long term "if it fails to build something affordable."
Walsh harshly criticized the London hub's current approach. "Heathrow’s long addiction to gold-plated construction costs has already earned it the unenviable standing as one of the most expensive airports in the world, if not the most expensive," he stated.
Therefore, IATA is placing the focus on the Civil Aviation Authority (CAA), the country's economic regulator. The organization urges the CAA to implement "regulatory and cost-control guard rails" to ensure an affordable airport for both passengers and airlines.
Frequently Asked Questions (FAQ)
- Why is IATA criticizing the Heathrow expansion if it supports it? IATA supports the idea of expansion for connectivity but criticizes the current plan for its excessive costs, labeling them "gold-plated" and "unaffordable."
- Who is Willie Walsh? Willie Walsh is the Director General of IATA. He was previously the CEO of IAG, the parent group of British Airways, Heathrow's main airline, making him very familiar with the airport's operations.
- What is the APD (Air Passenger Duty)? The APD is a tax the UK Government charges most passengers flying from British airports. Airlines argue this tax increases ticket prices and reduces competitiveness.
- What is IATA asking the regulator (CAA) to do? It is asking the Civil Aviation Authority (CAA) to establish strict cost controls and a transparent process to ensure the expansion remains affordable for airlines and passengers.
According to IATA, this process must begin with a "reassurance that there will be a transparent, competitive process" to determine what is built and, crucially, at what cost.
In addition to construction costs, IATA also targeted direct taxes on passengers. Walsh mentioned that next month's budget announcement offers an "opportunity to instantly shore up the UK’s competitiveness."
The proposed solution is a reduction or, at minimum, a freeze on the Air Passenger Duty (APD) rates. IATA considers this measure an "essential element" for the long-term success of any expansion plan pursued, as reported by IATA in a statement.
The association concluded by reiterating its readiness to work with the Government, the CAA, and all industry stakeholders to ensure that Heathrow's growth is sustainable, efficient, and beneficial to all.
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