IAG chief warns high costs could leave Heathrow's third runway underused

Currently, Heathrow charges about $33 per passenger as regulated by the UK Civil Aviation Authority (CAA). According to Gallego, this figure could double if expansion plans proceed as proposed. IAG owns British Airways—which operates about half of all flights at Heathrow—as well as Aer Lingus, Iberia, and Vueling.

British Airways CEO Sean Doyle also expressed concern over rising costs associated with the project. He stated: “Heathrow is already the world’s busiest airport, yet we’re looking at costs doubling from where they are today. It’s not just what passengers pay on their ticket but also the cost of every operator going in and out of Heathrow, regardless of landing fees. We’re concerned about the competitiveness and the value of money that we’re able to give customers.”

In response to criticism about higher charges, Heathrow maintains that expanding capacity will ultimately lower fares through increased competition and choice for consumers. Earlier this year, however, it faced backlash after proposing a 17% increase in landing fees.

Additional development plans include a $16 billion extension of Terminal 5—known as T5X—and $20 billion allocated for various modernization projects throughout the airport.

The expansion proposal continues to face opposition from local officials and environmental groups. London Mayor Sadiq Khan criticized the plan because of its potential impact on noise levels, air pollution, and climate change targets. In contrast, Prime Minister Sir Keir Starmer supports moving forward with construction by 2030.

There are competing proposals for how best to expand Heathrow’s capacity. Developer Arora Group has put forward an alternative plan featuring a shorter runway at lower cost.

Some industry stakeholders back Heathrow’s expansion efforts. easyJet CEO Kenton Jarvis said that growth would allow his airline “to operate from the airport at scale for the first time and bring with it lower fares for consumers.”

Heathrow overcame legal obstacles in 2020 when it won a UK Supreme Court case allowing expansion plans to proceed after earlier setbacks; progress was delayed during the COVID-19 pandemic.

London Heathrow remains British Airways’ primary hub alongside London Gatwick Airport. The carrier is part of IAG and belongs to the oneworld alliance.