Star Alliance warns Heathrow expansion costs risk airlines

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Star Alliance warns on Heathrow costs

Highlights

Star Alliance CEO Theo Panagiotoulias warns that Heathrow's proposed third runway and terminal costs are prohibitively high, urging project cutbacks to avoid pricing out airlines.
British Airways and Virgin Atlantic, Heathrow's two largest carriers, also express concern over escalating expansion costs, intensifying the industry debate on airport charges.
Heathrow CEO Thomas Woldbye rejects Arora Group's lower-cost, shorter runway plan in favor of a 3,500-metre M25-crossing runway, citing viability despite ministerial support for phased construction.

Airlines push for a cheaper runway plan

As reported by Financial Times, Star Alliance chief executive Theo Panagiotoulias says Heathrow's proposed third runway and terminal scheme resembles a top-end luxury purchase that airlines may want but cannot easily afford. He says the alliance, whose 26 members include Lufthansa and United, supports expansion in principle but wants parts of the "eye-watering" project cut back to avoid pricing carriers out of the airport.

Panagiotoulias compares the plan to a fully equipped Mercedes-Benz, arguing that demand for extra capacity at Heathrow is real but that there is no simple answer to the cost of delivering it. Star Alliance members account for about one in six flights departing Heathrow, making the group's intervention significant in the broader industry debate over how the hub should expand.

Other major airlines are also voicing concerns over the potential financial burden of a third runway. British Airways and Virgin Atlantic, Heathrow's two largest carriers, have both warned about the risks of rising airport costs as the expansion debate intensifies.

Policy debate sharpens pressure on Heathrow

Heathrow has long argued that its cost base reflects its location near London and the difficulty of building in a congested area. The airport maintains that expansion is necessary, but disagreement is growing over how extensive and expensive the final scheme should be.

Earlier this week, Heathrow chief executive Thomas Woldbye rejects a shorter and cheaper alternative proposed by Arora Group, saying the airport's own 3,500-metre runway crossing the M25 is the only viable option. He dismisses the rival proposal as "drawings on the back of an envelope."

Those comments follow the release by ministers of a draft Heathrow policy that allows runway construction in stages while still requiring planning permission for the full-length runway. The dispute over scope and cost highlights the wider economic and operational stakes for UK aviation, as airlines seek added capacity without a further escalation in charges.

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