BA predicts deadlock in UK airport expansion saga

LONDON Wed Jul 10, 2013 3:34pm BST

An airport worker walks across the apron past British Airways aircraft at Heathrow airport's Terminal 5 in London March 30, 2012. REUTERS/Phil Noble

An airport worker walks across the apron past British Airways aircraft at Heathrow airport's Terminal 5 in London March 30, 2012.

Credit: Reuters/Phil Noble

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LONDON (Reuters) - British Airways is working on the assumption that efforts to expand Heathrow airport will ultimately fail and the proposals from a commission on London's airport problems will be ignored next year, the head of the airline's parent said on Wednesday.

In some of his strongest comments yet on the fierce political battle over whether to build a third runway at Europe's busiest airport, IAG Chief Executive Willie Walsh cast the commission as a political football whose recommendations would be put aside after 2015 elections.

Heathrow operates at around 98 percent capacity and opposition from local people and environmental activists, concerned by the noise and pollution another runway would generate, has already seen its expansion knocked back once.

BA and other interested businesses argue the project would be a huge boost for UK economic growth, forcing the current government to set up a commission to look again at how to expand London's aviation capacity.

"I suspect the recommendations by the committee won't be acted on by politicians... I'm critical of the politics behind their decisions," Willie Walsh, the CEO of International Airlines Group told a public evidence session in London on Wednesday assessing the country's future aviation needs.

"This government gave no credible alternative to a third runway so BA will continue planning for the future on the basis of a two runway Heathrow."

Overturning the previous Labour administration's decision to build the third runway, Britain's Conservative-led coalition government, in power since 2010, also ruled out expanding London's smaller airports.

The government's commission on airport capacity, chaired by former Financial Services Authority head Howard Davies, will publish an interim report by the end of next year with a final report due in mid-2015. British aviation officials will submit their proposals to the commission next week.

About 1,300 flights arrive and lave from Heathrow daily. BA is the largest airline there with around 40 percent of the take off and landing slots.

London Mayor Boris Johnson is pushing for a new four-runway hub to be built in the Thames Estuary east of the capital while other groups would prefer to see Britain's regional airports expanded.

"I don't see how you can finance the building of a new four-runway hub in London," said Walsh of the Thames Estuary idea," said Walsh.

"How can you fund development if you have no revenues? The idea that sovereign wealth funds will just hand over the money to build it is just ridiculous."

Colin Matthews, the chief executive of Heathrow, maintains that no taxpayer money would be used to build a third runway at Heathrow, which he said would be funded by a combination of the airlines that use it and private investors, who would get a share of revenues generated by passenger landing fees.

Noise produced by airlines using Heathrow affects some 700,000 local residents, according to Britain's Civil Aviation Authority, more than any other airport in Europe.

(Editing by Patrick Graham)

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