Air Freight News

Virgin CEO slams Heathrow curbs, moots bid for own terminal

Virgin Atlantic Airways Ltd. called on regulators to ensure Heathrow airport returns to full capacity next summer and linked his support for a third runway to measures that improve competition with British Airways, such as Virgin’s own dedicated terminal.

Chief Executive Officer Shai Weiss is concerned that 2023’s peak season will see a repeat of capacity caps imposed by the UK hub earlier this year amid staffing shortages, he said Monday at the Airlines 2022 conference in London.

Britain’s Civil Aviation Authority “must not allow our only hub airport to sleepwalk into another entirely avoidable period of disruption,” Weiss said. “It should be responsive and accountable to its customers and cannot be allowed to unilaterally restrict capacity.”

Heathrow imposed a cap of 100,000 departing passengers a day through much of the summer schedule amid a lack of workers. While that limit was removed at the end of October, the airport has warned the customer tally won’t match the pre-pandemic level of 81 million until 2025 or even 2026.

Weiss, who has previously accused Heathrow of playing down the strength of the recovery as it seeks CAA permission to hike fees, said the hub must make more “honest and accurate passenger forecasts” in its resource planning.

Heathrow initially forecast a passenger tally of 45 million this year but now projects as many as 62 million, and regained its status as Europe’s busiest airport over the summer.

Staff Shortfall

The hub had also intended to impose ad hoc curbs on capacity in the lead up to the festive season, but dropped the plan amid pressure from airlines.

Heathrow CEO John Holland-Kaye said in an interview at the conference that while traffic is expected to lag behind 2019 levels next year, peak numbers may match the pre-pandemic norm, though there’s no indication that curbs will be needed. He said pre-Christmas caps were avoided after carriers including Virgin agreed to reschedule some flights to “smooth schedules.”

Holland-Kaye said conversations he’d had at the conference were overwhelmingly focused on concerns about levels of demand rather than inadequate capacity.

The airport as a whole remains 9,000 workers down on its 75,000-strong payroll before the coronavirus, the CEO said. Heathrow itself, which directly employs 10% of the total, is largely back up to its full complement.

Bargaining Chip

Weiss said that Virgin Atlantic, controlled by billionaire Richard Branson, would like to see Heathrow go ahead with plans for a third runway but will offer full backing only if growth plans are accompanied by steps to boost competition.

“We would support a third runway if and only if more competition is provided,” he said. “We’ve learned a lot over the last few years through the pandemic and the last consultation on the charges to refine our unequivocal support to a more tentative support.”

New UK aviation minister Charlotte Vere said at the conference that the CAA runs an “independent” process in determining Heathrow charges which provides “ample opportunity for consultation.”

Heathrow also needs “massive renovation” and new thinking around its business model, Weiss said. That could include a switch to airline-owned infrastructure as seen in the US, so that Virgin would be able to operate a dedicated terminal, just as British Airway does, he said.

Fee Decision

Regarding higher fees, Weiss said that a 120% uplift sought by Heathrow would be “great for the airport and its mostly foreign shareholders, but a bad deal for consumers, airlines, and the UK economy.”

A decision on prices is likely later this year or early in 2023. CAA chief Richard Moriarty said in an interview at the conference that the regulator plans to issue an update before Christmas, without commenting further.

Holland-Kaye said Heathrow’s push for increased pricing for airlines shouldn’t mean higher fares for travelers and that the debate concerns “how the value is shared between the airlines and the airport.”

Heathrow’s third runway plans were held up by the pandemic and the CEO said the airport is now working on how and when to restart the planning process, with an update planned in the new year.

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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