Heathrow third runway sparks calls for regulatory reform amid airline backlash

The longstanding debate over Heathrow Airport’s third runway has reignited tensions between the airport’s management and major airlines, with industry heavyweights Virgin Atlantic and British Airways pushing for sweeping regulatory reforms. The proposed £60 billion-plus expansion has sparked concerns that airlines, and ultimately passengers, will bear the financial burden of the development under the current regulatory model.

Virgin Atlantic’s Chief Executive Shai Weiss and Luis Gallego, CEO of International Airlines Group (IAG), which owns British Airways, are jointly advocating for changes to the way Heathrow operates. They have criticised the airport for monopolising terminal operations and inefficiently managing capital expenditure projects. Weiss pointed to the fact that Heathrow remains one of the most expensive airports in the world, owing to its ability to set landing charges with little oversight under its regulated monopoly status.

Speaking to the press, Weiss outlined the need for increased competition to drive efficiency, suggesting that airlines could be given control of terminals as seen at international airports like Munich, where Lufthansa co-owns and operates terminal infrastructure. Gallego echoed Weiss’s sentiments, proposing the creation of a new investment committee that would allow airlines to vote on capital spending decisions. This, they argue, would encourage accountability and curb the airport’s excessive costs.

The costs of Heathrow’s planned third runway are a particular sticking point. Original estimates of £20 billion have ballooned to as much as £64 billion. Much of this expense is linked to redesigning the M25 motorway, which the runway’s preferred design would intersect. Airline representatives claim that a shorter runway, achievable without encroaching on the motorway, would significantly lower costs while still meeting operational requirements.

Nigel Wicking, Chief Executive of the Heathrow Airline Operators Committee, voiced his frustration with the airport’s deteriorating performance, comparing terminals such as T3 and T4 unfavourably to other global hubs. He stated that airlines simply want “an airport that works” rather than being saddled with spiralling costs and unreliable infrastructure.

The debate has also been shaped by the government’s recent greenlighting of the third runway project, a move Chancellor Rachel Reeves framed as a key driver for UK economic growth. However, critics of the current regulatory framework argue the system disproportionately benefits Heathrow’s overseas owners while stifling competition, raising costs for both airlines and passengers alike.

With the backing of companies like Virgin Atlantic, British Airways, and other stakeholders, calls for regulatory reform have intensified. Industry insiders are pressing for a complete rethink of how Heathrow is managed, shining a spotlight on whether opening terminals to airline ownership or third-party competition could bring relief to the sector while ensuring passengers see better value for their money.