Airlines attack government's indecision over aviation policy

An aircraft comes into land at Heathrow Airport in London February 13, 2012.

LONDON (Reuters) - Britain's aviation industry said the government needs to come up with a clear, long-term policy to address capacity issues at its main airports, or face the prospect of falling further behind European rivals.

Britain will launch a consultation document on aviation next month, with Ferrovial-owned BAA expected to lobby again for a third runway at Heathrow Airport, which it operates.

A group made up of BAA, British Airways-owner IAG, Virgin Atlantic, Manchester Airports Group, the Trades Union Congress and the Chamber of Commerce said on Monday the government should implement a new policy immediately, and not rule out options favoured by the industry, such as a third runway.

It said it wanted the new policy to achieve cross-party consensus and a long-term commitment beyond one parliamentary term.

"We have had years and years of inactivity on aviation policy which shows this government and previous ones are out of touch with the impact of aviation on the economy," Willie Walsh, IAG chief executive, told reporters at a news conference.

"All options need to be considered, including a third runway at Heathrow, and if the government eliminates viable options from the process the consultation will become a joke."

A third runway would be funded by the aviation industry, not taxpayers, Walsh said.

Heathrow is operating at full capacity after the Conservative-led coalition government blocked development of a third runway when it came to power in 2010. It also refused to give the green light for additional runways at London's Gatwick and Stansted, preferring improved rail links instead.

Campaigners against a third runway at Heathrow say further expansion of the west London site would mean a huge increase in the number of planes flying directly over the capital.

The government could use the new study to rule out the option once and for all, or may rethink its opposition.

"All options need to be considered including new airports and runways but we need a decision quickly so we can get on with things and stop going backwards," said Virgin Atlantic chief executive Steve Ridgway.

BAA says Heathrow is falling behind rival European hubs such as Paris and Frankfurt in the battle for lucrative routes to China because of the constraints on its growth.

(Editing by Rosalba O'Brien; Editing by Elaine Hardcastle)