Heathrow’s third runway “is going to be empty” if high charges are levied on airlines and passengers to foot the bill, the airport’s biggest customer has warned.
British Airways’ owner, International Airlines Group (IAG), said the price paid per passenger could double under plans revealed on Thursday by Heathrow to invest almost £50bn in expansion and upgrades, including a £21bn third runway and new terminals.
The IAG chief executive, Luis Gallego, said: “The investment is going to be huge, and with the current regulatory model it is going to be very expensive for customers.
“If we build a new runway and don’t change the model, passengers are going to pay double. We risk a new runway that is going to be empty.”
Current airport charges are about £25 per passenger per flight, capped by the regulator, the Civil Aviation Authority, which adjudicates in a five-yearly settlement between the airport and airlines.
Sean Doyle, the chief executive of British Airways (BA), added: “We want a model that incentivises delivery of infrastructure efficiently – and we don’t think they have that now. The cost of adding capacity has been a lot more than elsewhere in the world.
“If we want to increase the number of passengers, we have to keep it competitive … If growth is at any price, it’s not going to happen.”
BA operates about half of all Heathrow flights, with its IAG sister airlines Aer Lingus, Iberia and Vueling also flying from the London hub.
Heathrow submitted “shovel-ready” plans to the government this week for a 3,500-metre-long runway, which it said it could achieve within a decade, and which could grow passenger numbers to 150 million a year.
Gallego said BA would also work with Arora, who submitted an alternative plan for a shorter runway, adding: “It’s good news we have two credible proposals. Competition is good to improve things. But any [plan] that is finally selected requires a change in the regulatory model.”
IAG said customer satisfaction at BA had continued to grow despite incidents such as the closure of Heathrow by a substation fire, which cost the airline about £40m, and baggage failures at the airport.
The airline was also one of the most affected by the air traffic control failure this week, with a number of flights cancelled and takeoffs delayed for an hour because of a radar-related problem at Nats. It did not echo Ryanair’s calls for the departure of Nats’ bosses.
Gallego said: “We are disappointed in the level of disruption and the impact it had on our customers at a peak time. And it’s disappointing that the lessons of previous disruption were not learned.”
after newsletter promotion
He said that the recent large-scale investment in BA’s operational resilience meant the airline “could manage the situation in an exceptional way”.
However, he added: “That said our chief concern for summer is still air traffic control. On an ongoing basis, France is our main concern with our flights.”
Strikes and staffing issues at air traffic control centres in Europe have caused widespread disruption, with overflights also affected during French strikes. Airlines have called on the EU to intervene. Ryanair said on Friday that more than 38,000 flights so far in 2025 had been delayed by French ATC.
The comments came as IAG reported strong profits for the first half of 2025, with operating profits rising 43% year on year to €1.9bn (£1.6bn), on revenues that rose 8% to €15.9bn, driven mainly by BA.
Transatlantic routes remained lucrative, with revenue per seat up 5.2% to North America overall, bolstered by premium fares. However, BA reported a “softening” and “weakness” in sales of its economy seats from the US.
Gallego said: “We have seen since the announcement of tariffs volatility in the market – the trend is slowly improving but still we see volatility and that situation in economy leisure.”