Death knell for Heathrow’s 3rd runway as Ferrovial cuts off…

death-knell-for-heathrow’s-3rd-runway-as-ferrovial-cuts-off…

Death knell for Heathrow’s 3rd runway as Ferrovial cuts off…

Death knell for Heathrow’s 3rd runway as Ferrovial cuts off funding – and CAA blocks high passenger charge rise
2021-10-30 22:58:00
Heathrow has been told by its regulator, the CAA, that it cannot raise its passenger charges for airlines by as much as it wanted. At present the airport can charge up to £22 per passenger, and it wanted to increase that to £43 in January 2022. But the CAA has said it will be capped at £24.50 to £34.40 for five years – with an interim figure of £30 set for 2022.  The CAA also reconfirmed its decision earlier this year on Heathrow’s regulated asset base, (RAB)  which determines how much money the airport can recover from its customers through charges. This will now rise by £300m, rather than the £2.3bn requested by Heathrow, which wanted to recoup its pandemic losses from consumers, but the CAA had refused. A final decision will be made in January.  So Heathrow’s finances are not looking healthy, and now their main shareholder, Ferrovial, has said it will not invest further in the airport, and is not happy about getting low returns.  The withdrawal of support by Ferrovial could be the final straw for 3rd runway plans. Heathrow passenger numbers now are about 45% of the 2019 level, and the airport does not expect numbers to return to those levels until 2026. .Tweet   Death knell for Heathrow’s third runway as Spanish investor cuts off funding Ferrovial, the Spanish investor, is blaming the decision on the CAA for blocking plans to increase Heathrow’s landing charges By Oliver Gill, CHIEF BUSINESS CORRESPONDENT (Telegraph) 30 October 2021 Plans for a third runway at Heathrow have been dealt a killer blow on the eve of the Cop26 climate change summit after its top shareholder signalled it will cut the airport off from further investment. Executives from Ferrovial, the Spanish infrastructure investor, attacked the UK’s aviation regulator for blocking plans to increase Heathrow’s landing charges by 90% from next year. Ignacio Castejon, Ferrovial’s airport head, claimed that the Civil Aviation Authority’s decision meant that shareholders would have to shoulder “low returns”. He said: “It makes me feel very sceptical about the appetite to contribute further capital into Heathrow.” Progress on a third runway at Heathrow was disrupted by a sharp fall in air travel during the pandemic that forced the airport to concentrate on its survival. The airport’s boss, John Holland-Kaye, has insisted that the £14bn scheme will eventually go ahead however. The withdrawal of support by Heathrow’s biggest shareholder, though, is likely to be fatal. One senior aviation consultant, who has worked with Heathrow for two decades, said: “This is an affirmation that this is not going to happen. Where is the capital going to come from? It has to be paid for.” Opponents of the expansion took heart from the news, with world leaders set to meet at the Cop26 summit in Glasgow this weekend. Responsible for around 3% of the world’s global carbon emissions, the aviation sector is under pressure to reduce its footprint. Commercial aircraft powered by hydrogen or electric are years from entering service, meaning that finding ways to reduce air travel will feature prominently during discussions at the conference. Ferrovial is backed by hedge fund billionaire Sir Christopher Hohn, one of the biggest donors to Extinction Rebellion. Its members joined Greta Thunberg on Friday in protests in London ahead of the climate change summit. Ms Thunberg told banks to “stop funding our destruction” by investing in fossil fuel projects. Paul McGuinness, chair of the No 3rd Runway Coalition, said: “The only lifeline left is the prospect that the shareholders will do what they have never done, and inject some cash. And that their biggest shareholder has no appetite to do so may well be the death knell for Heathrow and it’s expansion.” Though the CAA blocked Heathrow’s planned increases in landing charges, they have proposed allowing them to rise by up to 56%. This means a family of four travelling to Florida will be paying an extra £100 or more to fly from the airport, leaving airline bosses as angry as the airport counterparts. [ie. a £25 extra charge per person]. Willie Walsh, the former boss of British Airways and now head of airlines body Iata, said the CAA decision, subject to consultation, warned passengers risked being “ripped off”. But Ernesto Lopez Mozo, Ferrovial’s finance chief, said: “To be blunt, we are quite disappointed with these initial proposals. “We are losing as investors,” he said. “The situation has not been answered in the way we expected.” Ferrovial is the biggest of Heathrow’s shareholders, owning a 25pc stake. Other backers include sovereign wealth and pension funds from China, Singapore, Qatar and Canada. The UK’s Universities Superannuation Scheme (USS) is the smaller investor with a 10pc shareholding. Anthony Clake, a hedge fund manager at Marshall Wace, backed an alternative proposal to expand capacity at Heathrow. Jock Lowe, a former Concorde pilot who led the bid, said: “We are not surprised Ferrovial is giving up. We always said that Heathrow Airport’s third runway proposal was doomed to fail because it was too expensive and environmentally damaging.” https://www.telegraph.co.uk/business/2021/10/30/death-knell-heathrows-third-runway-spanish-investor-cuts-funding/?li_source=LI&li_medium=liftigniter-onward-journey . Heathrow air traffic may not recover until 2026, says boss 27.10.2021  (BBC) The boss of Heathrow Airport has warned air traffic may not recover completely until at least 2026 despite signs of huge pent up demand for travel. John Holland-Kaye told the BBC that Britain’s busiest airport was still making losses even though international travel rules were easing. He also hit back at the aviation regulator for limiting a rise in what it charges airlines for using Heathrow. Airlines at Heathrow make a good return and investors want the same, he said. Mr Holland-Kaye said the airport was still only seeing passenger traffic at around 45% of 2019 levels. “It’s definitely been a tough 18 months but we are starting to see the recovery coming through,” he told the BBC’s Today programme. “Now all we need to see is stability in the travel rules, so people are confident of what we need to do and the airlines can build it into their systems.” Th

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