Your final sentence is key, Trash. Yes, the CAA rightly restrict HAL's charges on the grounds that HAL has substantial market power, such that normal market mechanisms can't prevent it from overcharging. So regulation is required.

The net effect of this is to transfer the economic 'rent' to the airlines, who end up being able to make supra-normal profits. The underlying demand for flights ex-LHR is substantially higher than the available capacity, and BA (and others) are able to charge higher prices than would be possible in a normally functioning market (hence my reference to BA rationing demand by price). This will only intensify as LHR capacity is constrained. That's an enticing prospect for BA in particular, until such a time that the regulators train their attention on the airlines as well as on HAL.

You are right I have not read all the Davies report, perhaps I should. However having been in the aviation community for 34yrs, started flying ex LHR in 1969, when it then had 3 R/Ws I have observed that environmental interests always prevail. Take the building of Munich, Oslo, CDG, HKG, a/p's etc, plus numerous battles for extra R/W's at FRA NRT MAN.
So the normal progression is extra terminals, ie the original T2 extention plus T4 at Lhr leading to the closure of R/W 23, then T5, and so surprise surprise an airport becomes capacity constrained
The UK was urged in Dec 2002 by IATA to expand Lhr capacity, 13yrs later zilch
No politician is going to have the bottle to bulldoze circa 1000 homes and subject 8 million Londoners to twin parallel approach noise paths throughout the day.
Most major airports have night curfews, and one thing Davies did say was "no movements before 6am" Current Lhr will not be able to comply with this.
Having been in the business and seen worldwide the effects our operations conflict with those below, I am convinced the tiny % of business travellers viz the rest will not win this arguement

I agree Walnut. The argument was lost 25 years ago and it is now too late. Way too late to build another. BA will be delighted - but they will continue to lose customers. However, it will happen slowly over time and no one will get the blame.

And this abuse of market power is why I said, on another thread, Lgw should get a second runway to prevent this happening. Capitalism doesn't always behave well towards the consumer and we have seen enough of the effects of that in the UK already, big banks, big supermarkets etc. Allowing Lhr to expand and making it very difficult for others to compete, eg at Lgw, only rewards further the monopoly situation that almost now exists with regards to long haul ex London. With London being one of the biggest markets in the world, these airlines that threaten to go elsewhere, like CDG, will never walk away from London, regardless of what they say. As the market grows and they want a share of it, if the only option was Lgw with a second runway or nothing, they would be in there in an instant. And I believe in capitalism all the way.

I just don't follow that line of argument True Blue. EU rules say that 50% of the new slots at LHR have to go to new entrants as defined. Surely that, together with increased slots for existing carriers at LHR must dilute the monopoly power of the incumbents, which is no doubt why WW says what he says on behalf of his shareholders. Surely expanding capacity at the hub must be more pro-competitive than expanding capacity somewhere thirty miles away which is only in competition with LHR for parts of the market. And, surely if it turns out for one reason or another that LHR3 is no go, it is still possible to turn to LGW as a second best option.

The acid test is what's in the national interest, not what's in BA's interest.

And by the time it is built in 10+ years time, it will fill up in a flash, back to monopoly position.

Anothertyke is absolutely right. Competition would better be provided by expanding LHR, where the current barriers to entry result in the incumbents having market power. Expanding LGW wouldn't help resolve this. The imbalance between demand and capacity at LHR hasn't been resolved by the fact that the other London airports have had substantial surplus capacity for years. And it wouldn't be resolved by a second runway at Gatwick.

It's worth reading easyJet's submission to the Davies commission.

What are the chances the government will give the green light to a third runway at Lhr and let a legal challenge do the dirty work and sink it through the courts? That way, no blame on the government. Also the election of a new Labour party leader might have a big bearing on this as well?

Big loss of face for Cameron and Ossie to Boris if that happened. I think the six months from Davies to the decision point is for the system to get the ducks in a row. That includes taking a view on all the risks---legal, protestor, cost escalation, the financing, the regulatory deal etc---and how to manage them.

If they go for it and it falls over subsequently that will be egg on face not some devilish plot.

Labour---aren't all four in favour?

No, only 3 of them.

Jeremy Corbyn's election as leader of Labour party could scupper plans for third runway at Heathrow - UK Politics - UK - The Independent

I wonder how much WW is being influenced in his extreme negotiating position by conversations he's been having with MO....
TB - I don't think those operating LHR-JFK would agree there's a monopoly at LHR.

there is a virtual monopoly when it comes to airports and it would seem the strength of Lhr prevents anything meaning full from getting off the ground at Lgw or Stn. And what was discussed earlier on this thread, higher fares for us as a result.