Airlines sound alarm over 'blank cheque' for Heathrow third runway

The true cost of Heathrow expansion is likely to be “grossly” higher than the £14.3bn the airport has cited, airlines have told MPs, adding that transparency and guarantees should be supplied ahead of a crucial vote.

Willie Walsh, chief executive of IAG, British Airways’ parent company and the main operator at Heathrow, said parliament should not trust Heathrow and said he had “zero confidence” that a third runway would be delivered on time and budget.

However, Heathrow said it would not bow to pressure from “vested interests” to reduce costs at the expense of commitments on noise, environment, jobs and improved national air links.

In a final session of the transport select committee’s inquiry into the national policy statement backing Heathrow expansion, airline executives sounded the alarm over the “blank cheque” and urged MPs to secure pledges before parliament votes to endorse a third runway.

Walsh told the committee: “It is very easy to deliver on budget if you have a massive contingency in your budget that you can waste. We don’t know what the budget is yet. We don’t even know what the plan is.”

Walsh added: “When we’ve asked for disclosure ... what they are saying is ‘trust us. Give us your approval and support’. I don’t trust them and you shouldn’t, either. This is too big an issue to base a decision on the trust of Heathrow’s statements.”

He said that higher charges risked making an expanded Heathrow too expensive and a “white elephant”. He said: “You have to have clarity. You have to have guarantees ... Otherwise we shouldn’t waste any more time and look for an alternative.”

Craig Kreeger, chief executive of Virgin Atlantic, called for Heathrow to make a “passenger cost guarantee” before proceeding with its third runway plans. He said: “We find ourselves in a position where our endorsement is sought for a plan where the consequence of an overspend will be borne by the airline and its customers.

“They have the most information on how likely the costs are to be deliverable – and they should bear the risks of their estimate being grossly, grossly off target.”

EasyJet’s UK director, Sophie Dekkers, said the airline welcomed that the transport secretary and Heathrow had said the charges would be as close as possible to current levels but “we would want a commitment”.

Walsh called for competition to be brought in at Heathrow, with third parties allowed to develop and run terminals. He praised Surinder Arora, the hotelier and developer who owns about 200 acres of land in the airport expansion zone and is lobbying to take on the project, adding: “Heathrow is campaigning very hard to ensure it doesn’t happen and that should set alarm bells ringing.”

In a pre-emptive strike ahead of the hearing, the Heathrow chairman, Lord Deighton, wrote an open letter on the importance of expansion. He said: “We will deliver this project while keeping airline charges as close to current levels as possible, having already stripped out £2.5bn of costs from our initial proposals.

“But let me be clear. We will not renege on these commitments no matter what the pressure to reduce costs or amend our plans in favour of one vested interest or another.”