Heathrow landing fee claim not credible, says ex-BA boss

By Dominic O'Connell
Today business presenter

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The former boss of British Airways, Sir Rod Eddington, says Heathrow's claims it will not raise landing charges to pay for a new runway are not credible.

Sir Rod told the BBC it was "very difficult to see how that is possible".

"More importantly, the airlines themselves do not believe that it is," the Australian businessman added.

He is leading a consortium advising Surinder Arora, the hotel magnate who claims to have come up with a cheaper plan for Heathrow's third runway.

Mr Arora claims his scheme will cost up to £7bn less than Heathrow's, which is costed at £17.5bn.

Heathrow has dismissed the Arora scheme, saying its ideas had already been ruled out by the Airports Commission, the government body that studied potential sites for a new runway in the south east of England.

Sir Rod, who drew up an influential report on Britain's transport infrastructure for the then chancellor Gordon Brown a decade ago, said the Arora plan had sprung out of concerns that airlines and other businesses at Heathrow had with the airport's own scheme.

"They are concerned about the costs," said Sir Rod, one of the world's most experienced airline bosses having run Australian airline group Ansett, Cathay Pacific and British Airways.

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The full savings that could be achieved would depend on final decisions on the orientation and length of the new runway, but significant costs could be taken out in the construction of a new terminal and how the existing terminals were adapted, he said.

"We can't gild the lily - we need a new runway, but if it's not affordable, it runs the risk of driving business away from Heathrow, not attracting it."

Heathrow said it had shared its plans with airlines "at every step".

"While the Arora plan may appear to reduce financial costs, it was in essence, rejected by the Airports Commission because of the significant environmental burdens it would impose on many," the airport operator said.

"We remain 100% committed to delivering expansion affordably - but we will not compromise on commitments made to local communities."

Analysis: Dominic O'Connell, Today business presenter

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image captionSir Rod wrote an influential report on UK transport for Gordon Brown

Given Sir Rod Eddington is advising a rival, you might expect him to be critical of Heathrow's runway plans - in particular its claim that it can build the new strip without raising charges.

But Sir Rod's voice carries weight.

Not only is he a former chief executive of British Airways, the main airline at Heathrow, but he also ran Ansett, the now defunct Australian carrier, and Hong Kong's Cathay Pacific.

He also did an influential report on British transport for Gordon Brown, is doing a similar job now for the Australian government, and sits on the board of 20th Century Fox, one of Rupert Murdoch's two big media companies.

His intervention - he says he doesn't believe Heathrow can keep costs down, and hints charges may have to double - comes at a crucial time for the airport.

While the government has been supportive of a new runway at the London hub, its wafer-thin majority means nothing can be taken for granted.

Having a senior figure like Sir Rod attacking its financial credibility is far from helpful.

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