Heathrow airport explores options for smaller expansion
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Heathrow airport is exploring options for a new expansion plan that would prioritise smaller improvements before construction of a controversial third runway is considered.
Chief executive Thomas Woldbye, who joined in October, has launched an internal review into the airport’s options to increase its capacity, according to people familiar with the matter.
The review by the UK’s largest airport[1] is still in its early stages and no decisions have yet been made, the people added.
One option under consideration is a new plan to initially focus on easier and cheaper improvements within the airport boundary before potentially moving to a third runway. The review comes against a backdrop of concern over the feasibility of major expansion.
The airport is assessing the shape of post-Covid demand for travel as well as the political and regulatory environment, the people said, noting that construction and financing costs had risen sharply.
Heathrow is also on the cusp of a change in ownership, after long-term owners Ferrovial agreed a deal[2] last week to sell its 25 per cent stake to Saudi Arabia’s sovereign wealth fund and French private equity group Ardian.
It has been attempting to expand its operations for the past two decades and appeared to be on the verge of applying for planning permission to build a third runway before the pandemic hit.
The government had backed proposals to increase London’s airport capacity through a new runway at Heathrow. In 2019 the airport set out plans for a £14bn project, including demolishing local houses and moving the M25 motorway into a tunnel to build a new airstrip to the north-west of the current airfield.
Under the 2019 plan, the third runway would have been built first followed by extensions and upgrades to terminals and the airfield. It aimed to eventually raise passenger numbers to 142mn a year compared with 81mn in 2019.
But some of the airport’s shareholders are increasing sceptical that a third runway is possible in the near future.
Heathrow runs under an annual cap of 480,000 flights per year, and its two runways operate at close to maximum capacity.
It could grow its passenger numbers while staying within the cap by improving current infrastructure to enable it to handle larger and fuller planes. The current two runways also have capacity to run more flights during off-peak periods.
However, a material rise in flights would require persuading the government to lift the flight cap.
Sir Howard Davies, head of the government’s review into London airport capacity before the pandemic, told[3] the Financial Times earlier this year he thought Heathrow was the right airport to expand.
“If you wanted a significant increase in London airport capacity then Heathrow is [still] highly likely to be the best place to do it,” he adds.
Other airports have meanwhile begun work on smaller projects, acting on a previous government policy that directed Heathrow’s rivals to “make best use” of their existing airfields.
Gatwick has launched a scheme to bring its standby runway into regular use, while Stansted, Luton and City airports have all laid out plans to grow passenger numbers without building new runways.
Environmental campaigners have said that airport expansion is incompatible with the aviation sector’s commitment to decarbonise by 2050, while the government’s Climate Change Committee recommended that no airport expansions should proceed until a UK-wide framework was in place to assess and control the sector’s emissions.
Heathrow declined to comment.