British Airways has a strangle hold on London’s Heathrow airport. A third runway at Heathrow would expand the airport’s capacity, and BA doesn’t want competition. However if a third runway does get built they believe that the majority of the extra capacity should be assigned to them (in the form of takeoff and landing slots).
A pair of takeoff and landing slots at London Heathrow has sold for over $70 million (for flights at peak times). So naturally Virgin Atlantic thinks it should get a government handout of 150 slot pairs as well.
British Airways at London Heathrow
Restrictions on takeoffs and landings, which are held by individual airlines giving them the right to operate, doesn’t actually reduce airport delays but does protect incumbent players from competition. Government hands out the right to operate at a congested airport, which is limited, and any new airline that wants to compete either cannot – or has to pay existing airlines handsomely for the privilege. These slots are a huge government subsidy.
British Airways and parent company IAG executives must be cheering at Waterside today because the British government has delayed any new runway at London Heathrow until at least 2028-2029 (and completion will likely take longer in practice than it’s being projected at now). The project has jumped in cost to $2.9 billion just in planning in early construction and the U.K.’s Civil Aviation Authority says Heathrow cannot move forward pending “the Planning Inspectorate to rule on its development consent order (DCO) application” otherwise much of the spending could happen and then the government in turn says no runway may be built.
London Heathrow Terminal 5
On the one hand it took 20 years from the time planning began for London Heathrow’s terminal 5 and when it actually was completed. The UK government announced support for a third Heathrow runway in 2009, so completion in 2029 would also be 20 years. Berlin Brandenburg airport may finally open so anything is possible. The runway could happen. However saying that it’s now a decade away, perhaps more, at least calls into question whether it will happen. At the very least a tremendous amount will change between now and the time Heathrow expands.