Virgin Atlantic fury as Heathrow forces Delta terminal move

Virgin Atlantic Airways has reacted furiously after Heathrow Airport decided to force its joint venture partner to relocate to another terminal - a move it warned would risk driving fares up for passengers.

Sky News can reveal that Heathrow Airport Limited began informing airline customers on Tuesday morning of the outcome of its roughly once-a-decade review of terminal occupancy.

A call with airlines is understood to have been convened for 1pm to outline full details of the proposed reallocation.

Industry insiders said only a small number of the roughly 80 carriers which operate from Heathrow would be obliged to move.

British Airways, which is owned by International Airlines Group and operates out of Terminal 5 at Heathrow, is not being moved, according to insiders.

Sources said that Delta Air Lines, which has an ownership stake in Virgin Atlantic and a code-share agreement with it, had been notified that it would have to shift its operations out of Terminal 3 to Terminal 4 from 2028.

The move sparked anger from the airline founded by Sir Richard Branson, with Virgin Atlantic's chief executive, Corneel Koster, who said: "If implemented in 2028, Heathrow's decision to separate Delta Air Lines from Virgin Atlantic, moving Delta to the remotely located Terminal 4, would create friction for customers, weaken competition and reduce choice.

"As all other airports seek to co-locate joint venture partners, Heathrow has chosen to split ours after more than a decade together."

Mr Koster warned that Virgin Atlantic would move to challenge HAL's decision, although it was unclear what legal mechanisms would be available to the company.

"If this goes ahead, consumers will pay the price," he added.

One source described the move as "one monopoly reinforcing another monopoly".

A Heathrow spokesperson told Sky News: 'Following consultation with our airline customers, Heathrow has developed a clear plan to make the best use of current terminal capacity and deliver a better overall experience for passengers, as well as strengthening operational resilience and creating room for growth.

"As demand to travel through Heathrow continues to grow and capacity remains constrained, the small number of moves will unlock more capacity across terminals, reduce congestion, improve the flow of passengers through the airport and help keep passenger costs down.

"We are committed to working closely with our airline customers as these changes are delivered."

The reallocation comes at a sensitive time for Heathrow and the wider UK aviation sector, with expansion of the UK's busiest airport remaining unresolved despite being near the top of the political agenda for decades.

HAL has proposed a third runway costing £33bn, part of a wider £49bn upgrade of the airport.

While John Healey, who delivers his maiden budget on Wednesday, has indicated his support for the expansion, Andy Burnham has appeared to be lukewarm about the prospect.

Heathrow insiders said the reallocation plans had been supported by airlines representing 81% of Heathrow's passengers.

They added that the final decision involved the fewest airline moves, the least capital expenditure and could be delivered the fastest, providing the best alignment with airlines' growth plans of all the scenarios examined.

Mr Koster added, however: "Our deeply integrated joint venture with Delta at Heathrow underpins the experience and competitive benefits we deliver.

"It enables fast and seamless connections, operational resilience and efficiency, while providing the most meaningful competition to the British Airways-American Airlines joint venture, helping secure lower fares and choice for customers.

"Separating our operations and customer-facing services would undermine these benefits and weaken our joint business.

"A level playing field for UK-based carriers and their partners is vital for consumers and the UK economy.

"Given Heathrow's significant market power and the expected impact on UK long-haul competition, we will now consider all available options to challenge this outcome."

Last year, Heathrow served close to 84m passengers, with pre-tax profits rising 31% to £917m.

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