Heathrow: we are not 'ripping off' airlines and passengers

Heathrow has insisted it is "not trying to rip anybody off" as it announced a near 11pc increase in revenue in the wake of controversy over its landing charges.
Britain's biggest airport said revenue jumped 10.7pc to Ј1.8 billion in the nine months to September 30 while pre-tax profit more than doubled to Ј266m from Ј112m the year before.
The number of passengers to have passed through its doors during the period rose 3.6 per cent to 54.8m.
The sharp rise in revenue and profits comes amid a fierce row between the airport and airlines over how much it will be able to increase landing charges over the five years from April 2014.
Britain's airports regulator, the Civil Aviation Authority, said earlier this month that increases in charges should be in line with inflation - a ruling Heathrow warned would drive investors towards other infrastructure projects which allow fairer returns on capital. Airlines, including Heathrow's biggest customer British Airways, slammed the price rises as "excessive".
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Josй Leo, chief financial officer of Heathrow, on Monday defended the airport's position, arguing that it is currently spending Ј4 million a day to ensure passengers have a better experience but investors would not keep up that level of commitment if they are not allowed to make returns "commensurate with the cost of equity".
"We are not trying to rip anybody off, what we need to make sure is that investment plan carries on and we are not taken by surprise with dramatic changes in the returns allowed," he said.
Mr Leo said Heathrow's investors, who include Spanish infrastructure group Ferrovial plus Qatari, Singaporean and Chinese sovereign wealth funds, were "disappointed" by the CAA's ruling. Heathrow had asked to raise landing charges by 4.6pc above inflation to help fund further improvements.
"They [investors] believe that this is like changing the rules of the game [overnight]," said Mr Leo. "If they have [investment] alternatives which are better both for the same level of risk or offer a similar return for better risk, they will move." Heathrow has the option to appeal the CAA's proposals but Mr Leo said no decision had yet been made.

telegraph