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Heathrow Airport remains vague on passenger fees whilst awarding investors a £455m dividend
- Heathrow awards investors a £455m dividend
- John Holland-Kaye admits it may have to increase passenger fees or face a Carillion-style financial crisis
- CAA says lack of clarity on Heathrow Airport fees and costs is “uncomfortable”
- Extending the northern runway is £5bn cheaper and guarantees keeping passenger fees flat
It is Heathrow Hub’s contention that the current regulatory regime for Heathrow Airport provides a perverse incentive for it to run up high costs in order to enhance shareholder returns and this is why it has proposed such an expensive and complex 3rd runway plan.
The news of the continued large dividends paid to Heathrow’s investors coincided with Richard Moriarty, the chief executive of the CAA, saying in a speech today that the current lack of certainty about the 3rd Runway’s costs is “an uncomfortable position to be in” and he urged the Airport to “move really fast to develop them.”
The publication of the half-yearly Investor Report [the dividend disclosure is on Slide 6] follows admissions by Heathrow’s CEO, John Holland-Kaye, that it could not commit to keeping passenger fees flat – at £22 they are already the highest in the world - and that to do so could lead to a Carillion-style financial crisis.
Heathrow Airport claims the 3rd runway will cost £14bn but the precise costs, the scheme design, how it will be financed and how much passengers and airlines will pay in charges remain a mystery and have not been fully addressed either by Heathrow Airport or the Department for Transport.
By contrast, Heathrow Hub’s proposal to extend the northern runway at Heathrow (ENR), is at least £5bn cheaper than Heathrow’s 3rd runway and has a detailed cost breakdown. Furthermore, it can be built in phases, with the first phase costing £3.9bn; a huge difference compared to the £14bn 3rd runway price tag. As a result, Heathrow Hub has guaranteed that passenger fees will remain flat. Low passenger fees are critical to maintaining regional connectivity.
Jock Lowe, director of Heathrow Hub, said: “Richard Moriarty is totally right about Heathrow’s vague promises on costs. We have campaigned tirelessly to show that our scheme is cheaper, simpler, quicker and quieter but the DfT has consistently refused to acknowledge our evidence. We have complained to the Competition and Markets Authority about the flawed process and are still hopeful that common sense will prevail, and our scheme be adopted.”