IAG CEO Willie Walsh Says It’s “Foolish” to Trust Heathrow

Airline industry leaders warned Parliament this week that without cost guarantees, the financial burden of ambitious projects to expand the UK’s busiest airport could quickly spiral out of control.

International Airlines Group (IAG) CEO Willie Walsh became the latest in a line of aviation industry leaders to encourage lawmakers to take steps to rein in costs before any expansion plans at London Heathrow Airport (LHR) receive final approval. The head of the British Airways parent company warned MPs on Tuesday that trusting airport officials to stay within budget would be “foolish” and could eventually lead to much higher costs for the flying public.

“Heathrow is saying trust me, we can deliver something for about £14 billion,” Walsh explained to a Parliamentary committee in testimony reported by the Telegraph.  “But we don’t know what it is, when it will be built or the constituent parts. They are saying trust us, give us approval and we will deliver on time and on budget but I don’t trust them and you shouldn’t either.”

Walsh echoed the sentiments of other major airline industry stakeholders at LHR, including the CEOs of Virgin Atlantic and EasyJet. The airline leaders have all gone on record to express concerns that the plans for expanded terminals and a new runway at the airport could usher in an era of exorbitant facility fees which could hurt the airlines’ bottom lines as well as passengers’ pocket books if serious cost controls are not put in place now.

“We find ourselves in a position where endorsement is being sought for a plan where the consequence of overspend could be borne by airlines and customers,” Virgin Atlantic CEO Craig Kreeger told the same committee earlier. “They should bear the risk of its estimate being grossly off target whereas today we, or our customers, would be holding the bag for any overspending on a very unpredictable outcome.”

EasyJet CEO Sophie Dekkers said that the current scheme for expanding LHR amounts to signing a “blank check.” She told the committee that approving the airport’s expansion without guarantees that costs will be kept in check “should not happen.”

LHR’s strategy for a third runway and expanded terminals was recommended by the Airports Commission in 2015. The airport is hoping an approved National Policy Statement (NPS) which will set the rules for the expansion, will follow the recommendation of the Airports Commission. Airport officials say it is time to move forward with the expansion, noting that years of seeking input from airlines, airport neighbors and environmental groups have resulted in the best and most equitable policy possible.

“The plan incorporates a number of revisions following consultation with stakeholders at various stages throughout the Airports Commission process,” LHR Airports Limited said in the latest update on the proposed project. “Issues raised by communities at local, regional, and national levels have been addressed and the plan is better for it as a result.”