Heathrow questions funding for new UK runways
Heathrow boss Colin Matthews claims private investors will refuse to fund much-needed new runways in the UK if the Civil Aviation Authority goes ahead with plans to reduce the returns that can be made on their investment.
Writing in the Daily Telegraph, Matthews claimed international investors were already reassessing investing in Heathrow and other UK industries.
Heathrow’s chief executive suggested the latest pricing proposal from the CAA, which governs how much the airport can charge airlines for its services, could put at risk funding for major projects, including a third runway.
"The return on capital investment allowed by the regulator five years ago was 7.75pc, and then it dropped to 6.2%," he wrote.
"Since then Heathrow has made a pre-tax loss in every year and shareholders have received less than 1% per annum return on their investment. That is unsustainable. Now the regulator is proposing to cut returns further to 5.35%.
Heathrow wants to increase its charges by 5.9% above inflation for five years from 2014 but was the CAA believes it should cap prices at 1.4% below inflation.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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