Virgin Atlantic has joined criticism of Heathrow in a multibillion-pound funding row, saying the airport should ask shareholders for help before putting up charges on Covid-hit airlines.
The airline urged Heathrow to “exhaust all private funding opportunities” instead of increasing airport charges, which could hammer profits for carriers already reeling from the collapse in global travel.
A bitter row erupted when the Civil Aviation Authority concluded that Heathrow’s demands to jack up fees by £1.7bn were not proportionate. In response, the airport’s finance chief threatened legal action.
Virgin Atlantic, majority owned by Sir Richard Branson, was taken to the brink of collapse this summer after the Government rejected a plea for £500m of state aid. It later secured £1.2bn from shareholders and a hedge fund.
In a letter to the CAA consultation, Virgin said it was pleased the regulator had “identified that [Heathrow] have provided little evidence to suggest that they have exhausted all their options to seek private funding, unlike Virgin Atlantic has been publicly required to do”.
Virgin added that Heathrow should seek fresh cash from shareholders, who were handed more than £100m in dividends in April. In a separate submission, British Airways accused Heathrow of “double charging”.
Heathrow responded to the consultation by suggesting it could restart paying dividends of £400m from 2022, meaning its investors – a consortium of pension, sovereign wealth and infrastructure funds from Spain, China and Singapore – would forego £1bn of payouts until then. The airport also increased its bailout demand to £2.7bn.
A Heathrow spokesman said the CAA refusal would make it harder for the Government to secure private investment for its infrastructure agenda.
Meanwhile, Luton became the first UK airport to reveal the impact of the second lockdown on its business. It welcomed just 105,000 passengers in November, around 90pc fewer than the same month last year.
The Government will introduce a test and release scheme in just over a week’s time, cutting quarantine from 14 days to five, if passengers are Covid-free.