Heathrow wants to put up ticket costs to recover covid losses – and the Government agrees

This article is closed to new comments. Feel free to ask your question in the HfP forums.

• kitten says:

  9 Feb9 February 14:17

  “Privatised profits, public losses”

  Are our government such fools? They privatised assets, and allowed monopoly profits to be collected. Profits were siphoned off to shareholders including large contingencies of them abroad.

  Now there are losses and systemic events which the privatised monopoly businesses should have provisioned for, been prepared to ride through or restructure for and/ or insured against, the government is going to allow thosr businesses to abuse consumers ? Instead of doing the usual thing a commercial business is required to do – have recourse to the above and their shareholders?

  So the government lets them privatise profits and public-ize losses. This is stupidity, a lack of competence as a government, or graft.

  I always thought the CAA had no teeth and not up to the task so far as consumerd were concerned, and now I know.

  • Anna says:

    9 Feb9 February 14:55

    CAA don’t even seem able to tell BA to stop breaking the law on passenger rights!

    • kitten says:

      9 Feb9 February 15:02

      Exactly.
      CAA seem great at regulating the operational side of air transport – which they seem excellent at – but so far as I can tell they have never gained the intellectual capacity or strength to regulate markets toughky enough and haven’t stepped up properly to protect passengers (consumers).

      The markets side of aviation revulation needs CMA as final word and consumer protection in aviation needs to be removed from the CAA and assigned to a competent agency with b*lls immediately.

  • Track says:

    10 Feb10 February 04:44

    Exactly, instead HAL (Heathrow Airport) seemed to made zero provisions in fat times.

    They were allowed to rack up charges to 17-18GBP per passenger for use of airport.

    No one monitored their capital adequacy. HAL have been returning massive cash to private shareholders.

• SteveD says:

  9 Feb9 February 14:47

  Surely the conversation should be something like this:
  HAL We need x billion pounds to keep going. Give it to us.
  CAA Or what?
  HAL We might go bust
  CAA And?
  HAL We’ll demolish all the buildings and dig up the runways so no one else can use them afterwards!
  CAA You won’t though will you?
  HAL (sulking) No
  CAA Do you mean your shareholders will be wiped out and they might be a bit miffed about it?
  HAL (more sulkily, staring at own shoes) Yes

  Seriously what’s the worst that can happen? Some short term disruption while an administrator sells the business on?
  And what’s most likely? More capital is raised so existing shareholders or lenders don’t lose it all. Call their bluff.

  • JDB says:

    9 Feb9 February 14:59

    @SteveD – I assume this is a joke. The public discussion that is ongoing between HAL and the CAA is a standard procedure for all regulated utilities and you can read the CAA’s latest report on its website. The regulated entity wants higher charges (via a higher RAB) and the airlines don’t. The CAA which has already consulted on this once, will listen to all the arguments, and the information from the current consultation and make a decision in the summer in respect of the exceptional circumstances. There is also the next 5 year review to be considered.

    • SteveD says:

      9 Feb9 February 15:17

      Oh sorry I thought that’s how all business was conducted. Glad you put me straight.

      I thought we were discussing the merits of Heathrow’s claim. But as there’s ‘nothing to see here’ until the summer I guess we can all shut up and go back to how well Beardy and Ernie are getting along this week. As you were.

      • JDB says:

        9 Feb9 February 15:59

        I think you missed my point, which was to the extent that we were discussing the merits or otherwise of Heathrow’s claim, your post was written without the benefit of the information contained in the report which sets out the regulatory background, the claim by HAL for regulatory relief, the opposing views from airlines and the regulator’s initial views. It is a complex situation that many commentators / armchair experts are opining on today without actually considering the full facts / detail which are publicly available. I am not offering a view either way, but it is incredible to read quite so much uninformed opinion criticising HAL, CAA, government etc. based on zero knowledge.

        • JDB says:

          9 Feb9 February 16:03

          PS. I apologise to those few commentators (they know who they are!) and Rob who do understand the complexities of utility regulation who have made useful a d considered contributions today.

        • SteveD says:

          9 Feb9 February 18:03

          Well obviously my original post was rather glib, and doesn’t acknowledge the complex regulatory process and technical arguments being made, but on this issue the underlying question is quite simple:
          How much money will flow and from where? Whatever, the technicalities, that is how you distil it.

          The CAA will make a decision. The ramifications for the consumer, the public purse, possibly both, could be significant. At that point the decision will need to be justified. Joe public is unlikely to be interested in the detail.

          Many readers may be indifferent, or be content to assume that the issue is so complex and specialised that whatever the outcome it must be the ‘right’ one as theyre in no position to argue.

          But I wonder if they’ll continue to think that if one result is that a standard RFS become £44+ the avios. Not suggesting that will happen but it is a reasonable end point in the decision tree.

        • Track says:

          10 Feb10 February 04:53

          From a pleb member of uninformed public: will be voting with my feet, avoiding Heathrow flights/unnecessary flights, even after the return to semi-normality.

    • Track says:

      10 Feb10 February 04:48

      Except that CAA turns out to be not as competent authority.

      We need a consumer watchdog in aviation, not porter service to the industry.

  • kitten says:

    9 Feb9 February 15:04

    🙂

• will says:

  9 Feb9 February 16:28

  If HAL had been prudent and paid minimal dividends then you could argue that it needs help.

  When you’ve paid out billions in dividends it’s not difficult to demonstrate that had it been run without those dividend payments then it would not need to seek more money now.

  Companies have very much got used to getting the begging bowl out only to distribute profits very eagerly at the first opportunity.

• zayn says:

  9 Feb9 February 20:08

  will they convert our 2 for 1 vouchers for this year into cash. So we don’t have to Fly with BA

This article is closed to new comments. Feel free to ask your question in the HfP forums.