Virgin acts on BAA handling of Heathrow snow

Virgin Atlantic announced it is withholding landing fess from London Heathrow operator BAA due to delays and cancellations caused by the airport's closure in Dec-2010 due to heavy snowfalls (Dow Jones Newswires/Financial Times/Bloomberg, 10-Jan-2011). The airline stated it will not pay landing and parking charges due from 01-Jan-2011 until it sees the results of an internal inquiry into the disruption. Fees owed by Virgin Atlantic, which added it has not ruled out legal action against BAA, are believed to be less that GBP10 million. British Midlands International has also stated it has assessed costs incurred from the disruption at Heathrow and will enter discussions with BAA about compensation. BAA is expected to put the cost of the five-day disruption over Christmas at between GBP20 million-GBP25 million. An a inquiry into the closure is expected by Mar-2011. The airport operator said in a statement: "Heathrow's conditions of use do not provide any basis for Virgin Atlantic or any other airline to withhold airport charges."

Virgin Atlantic: "We've told BAA we are going to hold back some of the monies we owe them. Because while we accept, and indeed we did, step up to our responsibilities to look after our customers, we feel they should also feel some of that accountability … We want this inquiry to really focus on what happened and when the airport reasonably should have reopened and then we want compensation for all the costs we unnecessarily incurred after that. We're going to do that by holding back the fees we pay BAA and when the inquiry comes out we will happily sit down and work out what the right numbers are." Steve Ridgeway, CEO. Source: Financial Times/Bloomberg, 10-Jan-2011.