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Airlines and hoteliers say Heathrow is the most expensive airport in the world. They want a fundamental review of the regulations set by the Civil Aviation Authority (CAA) that govern what Heathrow can charge. They say the current model makes it too expensive.
Businesses want to know if the airport’s funding model will be reformed before any investment is made in the proposed third runway. They say it won’t happen if not.
The CAA has said it will “carefully consider” conducting a review of Heathrow’s economic regulatory model.
A Heathrow source said that the airport management had already told airlines and the government that it would propose to look at a different, longer-term regulatory model for a third runway.
Surinder Arora, the chair of the Arora group which owns 16 hotels and lots of land around the airport, is pro-expansion but has his doubts it will happen. He says Heathrow is overcharging for many items. For example, he pays 2.62p a unit for a unit of water at the Renaissance Hotel, but 23.27p a unit at his Hilton hotel next to Terminal 2.
The current regulatory model allows Heathrow to charge what they want for many services, such as water, parking or construction, as they are a monopoly.
Without change, the third runway would not happen, he says. “If it stays the same then it won’t happen,” he says. “If you look at the last two decades they have never delivered a project on time and on budget… Why should the airlines and the government invest £62bn plus in a project that’s not going to make a profit?”
Nigel Wicking, chief executive of Heathrow Airline Operators Committee, says all of the costs are passed on to travellers. “Heathrow is rapidly falling behind other major airports around the globe both in facilities and service to airline customers, while having the unenviable accolade of being the most expensive for airport charges. This cannot continue,” he says.
The government has said it will back a third runway if it can be expanded within noise, pollution and carbon limits. This week, Heathrow Airport said it would be applying for planning permission by the summer.
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