IAG boss Willie Walsh, who this year took over his old airline, Aer Lingus, on how Dublin Airport might figure in his plans
Let’s just say it was hardly a shock when the Government deferred until next summer the decision on where to build a new runway in South-East England.
As head of British Airways’ parent company, I’m well aware the issue is politically toxic. For decades, no government has really been bold enough to bite the bullet and make a decision that ensures Britain can continue to gain the economic benefits and jobs that the aviation industry generates. In October 2008, the Labour minister Geoff Hoon agreed to become Secretary of State for Transport. Three months later, he announced approval for a third runway at Heathrow.
Hoon had already decided not to seek re-election as an MP in 2010. Short-term politics always wins over long-term economic gain — and frankly, I cannot see that changing in the future. The fact is the Prime Minister David Cameron now has a problem, which is almost entirely of his own making. In his effort to convince the electorate to support a Conservative government in the run-up to the 2010 General Election, he made his now embarrassing commitment at a public meeting in Richmond, Surrey, which of course sits right under the flight path: ‘No ifs, no buts, no third runway.’
As you can imagine, that hasn’t left him a lot of wiggle room in the years since then, as the need for new runway capacity in the South-East has become ever-more pressing. With the Tory leader having already placed himself so firmly in one camp, his Government has since tried to remove politics from decisions over a new runway by setting up the Airports Commission in 2013.
This summer, the Commission came up with its preferred option, a third runway at Heathrow, after a consultation lasting nearly three years and costing a reported £20 million. So what does the Government do? Accept the recommendation and bite the bullet? No, it has procrastinated further and put off making a final decision. For now, there has been a call from the Government for the gathering of more evidence about the environmental impact of any new runway.
Anti-Heathrow campaigners speak out about third runway plan Handily enough, that means the final verdict will come after the London mayoral election next summer, in which the Tories are fielding Zac Goldsmith, who is doggedly opposed to a third runway at Heathrow, as a candidate. Many say the delay is to avoid conflict with those elections next May.
To be honest, I am not convinced. We’ve seen a succession of governments dithering over this issue for so long that no new runways have been built in South-East England since World War II. That’s why I don’t think we will get a clear-cut decision even next summer.
History is not on our side. How they must be laughing in Paris, Frankfurt, Amsterdam, Dubai and Beijing. These cities all have governments that value aviation’s contribution to their economies. They’ve ensured their airports built the necessary infrastructure to encourage the industry’s growth, and connect their countries to a global economy. As for Britain, we’re a small island, and this Government looks set to make us even smaller on the world stage.
Our leaders bestride the world saying the UK is open for business, but their actions do not match the rhetoric. The Government’s history of indecision is the reason why I have not lobbied for any specific runway option during the Commission’s consultation. In the past, I backed a third runway at Heathrow. But when the Coalition Government overruled the Labour Government’s decision to build another Heathrow runway in 2010, I decided not to waste my time in future. I think that was a wise decision.
The company I lead, International Airlines Group — which was formed when British Airways merged with Spain’s Iberia airline — has created high-quality British jobs, employing 35,000 people, including hundreds of apprentices and graduates. As a manager I’m accountable for what goes on in my company, and for making it as successful as possible. This means I sometimes have to make difficult decisions, and ultimately the buck stops with me. If the Government continues to dither over a new runway, then I’ll move my business elsewhere. We now have airlines in Dublin and Madrid, and can expand our business there, supporting the strengthening Irish and Spanish economies.
Politicians have no accountability. They’re not interested in making decisions that will benefit the country if it’s likely they’ll lose votes over it.
As I said, their priority is short-term political gain, not long-term strategic value. They talk enthusiastically about big infrastructure projects — even setting up a National Infrastructure Commission — but when it comes to making decisions, they side-step as effectively as any international rugby player. If they are not immediately pressing ahead with Heathrow — as their own Airports Commission recommended — then logic suggests they must still be considering a second runway at Gatwick.
But I’d be staggered if that was the case. The Commission ruled it out because there’s no business case for expanding the West Sussex airport.
I’m not knocking Gatwick — it’s a good airport and British Airways operates many flights there.
However, very few airlines support the proposal, and no one would move there while Heathrow remains open. If the Government settles on a decision next summer — and I am not holding my breath — any new infrastructure that goes with a new runway must be efficient and cost-effective. That’s not the case if they opt for the current Commission plan for a third runway at Heathrow, which proposes unnecessary and overpriced gold-plated facilities. It is slated to cost £17.6 billion. But only £182 million of that — around one per cent — is for the actual runway. The new terminal would handle the same number of passengers as Terminal 5, yet would cost £3 billion more in today’s money.
Why? A four-mile underground train track would link the new terminal with Terminal 2, yet most passengers who transfer between terminals come mainly from Terminal 5, with some from Terminal 3, which is much closer. And to cap it all, a new car park would cost £800 million. £800 million! That’s outrageous. And it’s our customers who will foot the bill.
Unlike rail, airport building is paid for by passengers, not the taxpayer. People pay through airline fares when they travel through Heathrow. Currently they pay around £20 per passenger for each take-off and each landing. We estimate that would double, peaking at £40 each way, with this new plan, £80 for a return trip — or £320 for a family of four. This will turn Heathrow into a white elephant that no one wants to use. It is already the most expensive hub airport in the world, and earns more money than any other global airport. It’s not hard to see why.
At International Airlines Group, we’ve said that we and our passengers won’t pay for this project — and we certainly won’t pay for it in advance, as has been suggested. Already Heathrow is looking for contractors to start work. And that’s before a decision has been made! Why should our customers today pay for tomorrow’s passengers?
This is not just fighting talk — we have the practical ability to expand elsewhere. This means Spain and Ireland will get the economic benefits and new jobs from our expansion plans, while the UK Government twiddles its thumbs and watches as the world progresses around it. Maybe the Prime Minister will prove me wrong this time.
After all, he has announced that he will not seek a third term. ‘No ifs, no buts, no third term.’ Right?
Mr. Walsh’s comments, which originally appeared in The Daily Mail, are reproduced with permission of IAG.