BA hits out over £500m bill for failed airport plans

Heathrow airport is considering passing on the bill for its failed third runway on to carriers

A row has erupted between Heathrow airport and British Airways over the plans to hand airlines a £500m bill relating to the airport’s controversial third runway.

A regulatory consultation recommends allowing Heathrow to charge carriers for expansion costs incurred until February this year.

Judges blocked Heathrow’s controversial £14bn expansion seven months ago over climate change concerns – but not before the airport spent hundreds of millions of pounds in preparation.

Regulations allow Heathrow, which is owned by a consortium led by Spain’s Ferrovial and the Qatar state, to increase charges in line with costs incurred.

Willie Walsh, the outgoing boss of IAG, the FTSE 100 group that owns BA, has repeatedly clashed with Heathrow over the framework, which he has said encourages the airport to “spend recklessly”.

Campaigners cheer outside the Royal Courts of Justice after the third runway was blocked by the courts Credit: Stefan Rousseau/ PA

A spokesman for IAG said: “In any other business, a wealthy, privately owned company like Heathrow Ltd would have to meet its own sunk costs.

“But Heathrow is a monopoly that will simply pass the bill to the airlines, further damaging UK aviation as it struggles to survive the Covid crisis. The regulator must step in.”

A spokesman for Heathrow said: “The CAA established an approach to expansion-related costs some time ago – with that approach approved and agreed by airlines, including IAG. We believe this approach should remain.”

CAA director Richard Stephenson said it was reviewing responses to the ­consultation and had yet to make a ­decision.

The row came as ministers faced questions over claims that taxpayers would not pay for Heathrow’s expansion. Analysis by The Sunday Telegraph of Department for Transport filings reveals £2.4m has been spent on investment bankers, lawyers and consultants over the last year in relation to Heathrow’s third runway.

A spokesman for the DfT said “The Government has always been clear that any expansion at Heathrow must be privately funded. However we regularly draw on expertise from inside and outside Government, to ensure ministers can benefit from comprehensive advice on high-profile schemes. Any outside advice is procured subject to a rigorous business case to ensure value for money for the taxpayer.”