LONDON – The battle ongoing in London Heathrow continues as the price cap arguments intensify from Virgin Atlantic CEO Shai Weiss.
Weiss has called out the UK Civil Aviation Authority (CAA) for “putting the interests of a monopolistic airport and its shareholders ahead of passengers”.
This is due to the regulator proposing a price cap of £31.57 per passenger for 2023, following some interesting passenger forecasts provided by the airport.
The CAA set an interim cap of £30.19 in December 2021, which was supposedly utilized to ensure that Heathrow Airport could recover funds lost from the COVID-19 pandemic.
“By maintaining a pessimistic outlook for 2023 passenger forecasts, not only do customers face excessive charges but potentially also a poorer airport experience,”
The Forecasts Itself…
Heathrow is expecting to handle 60-62 million passengers this year, with airlines such as British Airways, Virgin, and even IATA accusing the airport of downplaying such forecasting.
Willie Walsh, the Director-General at IATA, called the CAA’s decision “frustrating and disappointing”, with IAG CEO Luis Gallego echoing Weiss’ words seen earlier in this piece.
With all this drama unfolding, the CAA has committed to making a final decision on the new price cap “in an orderly way”, with Heathrow’s owners Ferrovial mentioning that such a delay in decisions would undermine their financial commitments:
“The uncertainty caused by this delay is undermining our ability to commit capital to fund crucial investments to improve Heathrow’s experience for airlines and passengers.”
“As a long-time investor in the UK, Ferrovial calls on the CAA to finalize its proposals as soon as possible”.
Why Are Weiss & Others Placing This Pressure?
Weiss and others are placing this pressure on Heathrow and the CAA because they believe that this Winter 2022/23 season is going to be a busy one off the back of a successful Summer season.
And with this in mind, instigating high price caps is going to disable operators’ abilities to maximize their turnovers.
Weiss said the following to City A.M. on this: “There is enough time to get ready for the peak winter”.
“We intend to fly and to serve our passengers, and we expect Heathrow to do exactly the same.”
There has been criticism to each side that the efforts made in recruitment weren’t enough, especially with the high level of disruption that took place across UK airports in the Summer.
With that in mind, Weiss has said that the blame game needs to stop, and the focus needs to be on providing great customer service and returning to some form of normalcy.
It remains clear that this in-fighting will continue for some time to come between the airlines and London Heathrow Airport.
However, with the upcoming infrastructure strikes across the UK, this will no doubt hinder the airlines and airports further, which could intensify the opposition towards the UK Government instead.
Either way, the next few weeks are going to be interesting to watch as such tension and uncertainty continue to rise.