British Airways boss Luis Gallego says Heathrow has lost out to EU competitors.

Heathrow has fallen behind other airports due to high passenger costs, a lack investment and the high cost of passengers. This is according to the CEO of British Airways.

Luis Gallego is the CEO of IAG. He said Britain’s largest airport could lose out if it fails to lower fees and improve its efficiency.

He said: “What Heathrow needs is a more efficient airport, because the passengers pay here two to three times as much as they would in other hubs of Europe.”

Speaking at the Farnborough International Airshow in England, Mr Gallego stated that Iberia, IAG’s Spanish arm, will be expanding its capacity by 14pc, which is twice as fast as British Airways.

Mr Gallego stated that unlike London, Madrid “grows a lot”, and is becoming a “much competitive hub for south Europe”.

He said that to improve competition, bosses would be wise to explore expanding Heathrow’s capacity.

He did not support a third runway. Instead, he said he would support it only if the project was both financially and environmentally viable.

He said: “I’m not sure if we will have a runway at some point in the future. But we have always said we wanted one that was sustainable.

“Not only in terms of the environment, but also financially.” The customers must not have to spend a lot on it because we are competing with other large hubs in Europe.

Mr Gallego said that he hopes that the newly-elected Labour Government will reconsider the importance of Heathrow to the British economy.

He said: “We want to work with the new Government on this to see if it’s possible to improve the Heathrow Experience.” It is important for the UK to have a major hub.

IAG has already had discussions with the Labour government to promote its agenda.

“At the moment, the conversations are positive,” Mr Gallego stated. We all know that aviation is important for this country. “I’m confident that we will get along well.”

British Airways gets a “significant” boost from the King’s Speech commitment to encourage the production of sustainable aircraft fuel (Saf).

Saf is the most widely used anti-theft device in the world, but the carrier has to import it from the US due to the lack of a UK plant. The new policy aims to correct this.

The UK’s airlines must meet 10pc by 2030 of their fuel needs with zero-carbon alternatives. Fuels made from used cooking oils or ethanol from cereal crops are seen as the only realistic way to achieve this target.

“Mr Gallego said. “We have mandates for more Saf but we do not have the Saf.” We don’t know if we will make money from our plants. They want to know that the price will not go up.

IAG sees the appointment of Thomas Woldbye last year as the new Heathrow boss as an opportunity to reset relationships, especially after the recent row over landing fees.

Mr Gallego stated: “We have had meetings, and I believe we both want the same thing. We want Heathrow to grow and we want better customer service, so we’re looking at opportunities together.

IAG’s first quarter was strong, according to the CEO, but British Airways has been held back by a stubbornly low business travel demand.

He said that corporate volumes in the UK were stuck at 70pc below 2019 levels. Iberia, however, has already surpassed the pre-Covid standard for business travel.

Mr Gallego stated that fares are currently very different between regions. However, they are almost always higher today than a year earlier. The lowest occupancy levels are on routes that go to China and other Asian countries.

IAG hopes that Brussels will support its plan to acquire the Spanish leisure airline Air Europa, which is a long-haul carrier. However, other approvals are required before the merger can take place.

The group is also interested in TAP Air, a Portuguese airline, and is looking at M&A opportunities in South America where, he says, a series of bankruptcy filings made during Covid “changed” the landscape.