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UK airport expansion: concerns over costs and regulatory challenges

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UK airport expansion: concerns over costs and regulatory challenges
Research
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Kamil Al-Awadi Regional Vice President, Africa and Middle East | International Air Transport Association - IATA

The potential for quick growth at Gatwick and Luton airports should be taken advantage of, according to recent discussions on UK airport expansion. However, the decline in Heathrow's status is attributed more to costs than capacity. The airport's charges remain among the highest globally, which poses a challenge to the UK's competitiveness.

To address this issue, it is essential that these charges are reduced rather than increased further. This approach would ensure that current airline users are not burdened with expenses that should fall on the airport's shareholders and future users of expanded capacity. Concerns have been raised about Heathrow potentially inflating its construction costs, as has happened previously.

Regulators face significant challenges related to cost and efficiency, especially given the formidable environmental and economic barriers to expansion. Past performance by regulators has left airlines with little confidence in their ability to manage these issues effectively.

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Willie Walsh, Director General of IATA, expressed that while the statement of intent regarding these matters is welcome, airlines prefer immediate actions to enhance UK aviation competitiveness. "Frankly, while this statement of intent is welcome, airlines would prefer to see more immediate measures to improve the UK’s aviation competitiveness, starting with cutting the APD tax and the ETA visa waiver charge, and stronger incentives for cheaper sustainable aviation fuels," said Walsh.

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