Virgin withholds Heathrow payments

Tens of thousands of passengers were stranded when Heathrow closed down for several days due to snow [Reuters]

Virgin Group has stopped making payments to BAA, the operator of London’s Heathrow airport, because of the severe disruptions of flights during the massive snow storm that struck Europe in December.

The British airline made the decision to stop paying bills due from January 1 until the results of an internal inquiry by BAA into the disruption, due to be published in March, are made public.

BAA, which is owned by a Spanish infrastructure group, said in response to Virgin’s move: “Heathrow’s conditions of use do not provide any basis for Virgin Atlantic or any other airline to withhold airport charges.”

Tens of thousands of passengers were stranded when Heathrow closed down for several days before Christmas after heavy snowfall and freezing conditions iced up the runways and aeroplane stands.

The shutdown dealt a heavy financial blow to airlines as they bore costs such as ticket refunds and rescheduling of flights.

Airline hits back

Steve Ridgway, Virgin’s chief executive, told the Financial Times: “While we accept, and indeed we did, step up to our responsibilities to look after our customers, we feel [BAA] should also feel some of that accountability.”

One day of heavy snowfall on December 18 triggered chaos at Heathrow, all but closing one of the world’s busiest international passenger airports for several days and leaving thousands of angry passengers to bed down in terminals.

Ridgway expects the chaos will have cost Virgin Group a minimum of $15.5m.

Heathrow earns more than $1.5bn a year from its airline clientèle, which amounts to half the airport’s total annual revenue.

While the amount of money Virgin could hold back may not cause any immediate damage, BAA, the country’s largest airports operator, could potentially suffer a long-term financial dilemma if the rest of Heathrow’s 90 airline users follow suit.