IAG has said it would consider cutting flights at Heathrow if the airport goes ahead with its proposal to increase landing fees.
IAG chief Luis Gallego told the Airlines 2021 conference in London that “if the rise in landing charges goes ahead, I know IAG will not be alone in reconsidering our airlines’ use of Heathrow.”
IAG airlines – including British Airways, Aer Lingus and Iberia – make up roughly 50% of all flights in and out of Britain’s largest airport.
Heathrow wants to raise landing fees by a massive 90% – from £19.36 to £37.63 – over the next five years in an effort to offset the huge losses that resulted from the pandemic shutdown.
Heathrow says it has suffered losses of £2 billion in 2020 alone.
The Civil Aviation Authority (CAA) will allow the airport to raise the cap on airport charges by up to 76%.
Sovereign wealth funds
Airline bosses are opposed to any increase. In February 2021, IAG argued that Heathrow had already paid out £4 billion in dividends to its shareholders, including Qatar and China’s sovereign wealth funds.
“It’s not fair nor reasonable to ask consumers to bail out Heathrow. It’s a wealthy, privately owned company which should seek funds from its shareholders, as many other businesses in our industry have done to weather this pandemic,” it said at the time.
Hiking charges won’t help
Gallego has reiterated his opposition to an increase in charges this week.
“Hiking charges will not help,” he said.
“It will not attract demand – it will have the opposite effect. If the rise in landing charges goes ahead, I know IAG will not be alone in reconsidering our airlines’ use of Heathrow.”
The CAA’s decision prompted a critical response from IATA boss Willie Walsh, who said: “You can make a strong case that not only should airport charges not go up, but in fact I think you could argue that they could come down and Heathrow could continue to be fully financed.”