Heathrow claims prices inflated by 320 pounds by lack of third runway

17th Apr 2014 10:14

A report commissioned by Heathrow Airport has claimed that air fares may rise by up to 320 pounds by 2030 if it does not build a third runway. Consulting firm Frontier Economics said that prices for plane tickets were being inflated as demand in London was higher than supple. The report said the best outcome for passengers would be to allow both Heathrow and Gatwick to expand, as both airports are likely to be "heavily congested" by 2030.Frontier estimated that, if Heathrow built a third runway, the cost of a return flight could fall by as much as £300 per return fare by 2030 in today's prices. The Airports Commission calculated that the cost of building a third runway would amount to roughly £20 per return passenger. Heathrow Chief Executive Colin Matthews said: "This additional burden on both the cost of living for families, and on businesses, is entirely avoidable. The private sector stands ready to invest in the infrastructure Britain needs."Government has it within its power to lower prices for consumers by taking a clear decision to support expansion and end the years of prevarication that are now causing fares to rise and routes to be constrained."Let Britain Fly, a business-backed campaign to build cross-party political support to build new runways, added its voice to the story, saying that rising prices was the result of "simple economics" born of "political cowardice"."All of London's airports are forecast to be operating at full capacity by the mid-2020s, so it's not exactly rocket science to predict that fares are going to go through the roof," said Director Gavin Hayes. He added: "It's clear that if the Government don't get on and build new runways soon it's the travelling public that are going to pay dear for political cowardice on airports expansion. "Soaring fares will also make the capital a less attractive place in which to do business - choking future growth and jobs."Heathrow Airport Holdings is privately owned by FGP Topco Ltd, a consortium whose main shareholders are led Madrid-listed infrastructure group Ferrovial and Qatar Holding.Shares in British Airways owner International Consolidated Airlines Group were up 1.51% on the news, Easyjet 1.33% and Ryanair 0.90%.OH