Passengers at record high but Heathrow T6 ‘unlikely’

AIRLINES look set to avoid huge hikes in charges at an expanded Heathrow on the back of revised plans aimed at cutting the cost of the project.

Heathrow said it had been working with airlines to help it meet the Government’s challenge to complete the expansion scheme while maintaining charges close to current levels.

John Holland-kaye, chief executive, said initial plans had proposed the construction of an entirely new terminal – which would have been the sixth at the site – but now it was likely the existing Terminal 5 would be expanded instead.

Some airline bosses, notably Willie Walsh from British Airways’ owner IAG, have criticised the proposed costs of the new runway project, because of the potential to push up air fares.

“This reduces the cost of the project and improves passenger service, so we can deliver an expanded hub with a better passenger experience at a more affordable price,” Mr Holland-kaye said. “Airlines have always been clear they support expansion, but not at any cost, and we are working with them to bring costs down.”

Mr Holland-kaye said the airport had renegotiated contracts with some of its service suppliers, including air traffic service NATS, and cut the cost of its debt by issuing longer-dated bonds with a lower interest rate.

These initiatives helped it cut the charges passengers pay as part of their ticket price. Mr Holland-kaye said such charges fell 2pc to an average of £21.92.

This month the airport also reached a deal with Transport for London and the Department for Transport to make sure Crossrail serves all Heathrow ter- minals from 2019, an upgrade on the previous plan to only link the new rail service to Terminal 4.

The airport reported a 4pc rise in revenue to £1.37bn for the six months to June 30 and reversed the comparable period’s £232m loss to make a £311m profit. Passenger numbers also rose 3.9pc to 3.71m, an all-time record high for a half-year period.