Government confirms £49bn Heathrow scheme for third runway

The government has rejected a cheaper alternative plan for a shorter Heathrow third runway in favour of a £49 billion in-house scheme involving moving parts of the M25.

 

The choice of Heathrow’s scheme “at this stage” follows a “rigorous assessment” of the two options which determined that the airport’s proposal includes expansion plans that are “resilient and efficient”, according the government.

 

An alternative plan from hotelier Surinder Arora’s Arora Group for a 2,800-metre runway that would have cost less at £23 billion and avoided alterations to one of the busiest parts of the motorway failed to sway the government.

 

However, the possibility of other companies building and operating terminals at the airport remains, potentially enabling Arora Group to create its own projects at the site and drive competition.

 

Confirming the selection, the Department for Transport said Heathrow’s proposal will shape the review of the Airports National Policy Statement (ANPS) - the framework within which the planning decision on expansion at will be made.

 

Any amendments to the ANPS will be subject to consultation next summer.  

 

The £49 billion Heathrow proposal includes £33 billion for expansion and an £15 billion for upgrading the airport. 

 

The DfT said: “After requesting further information last month from the remaining two promoters, the government has assessed that HAL’s [Heatrow Airport Limited] proposal offers the most deliverable option and provides the greatest likelihood of meeting the government’s ambition for a decision on a development consent application within this parliament.”

 

The review will allow a planning decision by 2029 and London airspace to be redrawn to enable “quicker, quieter and greener flights” to take off from a new runway by 2035.

 

"Any amendments to the ANPS will be consulted on next summer after the transport secretary committed to completing the process three years faster than production of the policy statement in 2018,” the DfT noted.

 

“This will provide an important opportunity for businesses, communities, and the wider aviation sector to have their say. 

 

“Selection of the scheme to inform the remainder of the review does not represent a final decision on a third runway scheme or design, and any amendments to the ANPS will be subject to consultation and parliamentary scrutiny next year. 

 

“Exact details such as the length of the third runway, layout, and associated infrastructure implications will continue to be considered throughout the remainder of the ANPS review.”

 

A Heathrow spokesperson said: “We welcome the government’s support for our scheme to build a third runway at Heathrow – the UK’s gateway to growth. 

 

“Expanding Heathrow will mean more connectivity, increased trade, improved passenger experience and a huge economic boost for the British businesses that will help design and build it. 

 

"However, we still need further clarity as to how the crucial next phase of the project will be regulated. 

 

"We need definitive decisions from the CAA and government by mid-December so that delay to the project can be avoided and we can get on with delivering this vital project for our customers and for the UK.”

 

Airlines such as British Airways and Virgin Atlantic will seek assurances that they will not be burdened with higher costs and landing fees which would need to be passed on in the price of fares.

 

Campaigners against expansion of the London hub condemned approval of Heathrow’s third runway plan as an act of “national self-harm”.

 

Arora said: “The Arora Group accepts today’s announcement by the UK government, stating its preference for a longer runway at an expanded Heathrow instead of our own Heathrow West plans. 

 

“We welcome the government not having chosen a promoter for the scheme and that the option for a  promoter other than Heathrow Airport Limited remains possible. 

 

“It’s imperative there is a clear and transparent process for selecting a promoter to ensure it best serves the interests of consumers.

 

“Our main driver for an alternative runway proposal was to avoid the M25 and bring down both risks and costs of the expansion scheme. However that decision has now been made and we are firm supporters of expansion so will back its progress. 

 

"We are now reviewing how our plans will be adjusted to the longer runway scheme with the intention that we commence our own Development Consent Order.

 

“Aside from the runway length, we have long argued that regulatory reform and the introduction of competition at Heathrow Airport is absolutely imperative to keep costs under control at the airport. 

 

“If competition is not delivered via an alternative scheme for the runway, it must still come via the upcoming CAA review of Heathrow Airport’s regulation. 

 

“Heathrow Airport has the most expensive charges in the world and adding HAL’s proposed costs of expansion to these already high costs jeopardises the future of the airport as a globally competitive hub, and its ability to aide the UK’s economic growth agenda.”

 

Heathrow has long insisted that its full-length privately financed 3,500-metre runway is “shovel-ready” and would be capable of being operational within a decade, opening the capacity constrained London hub up to at least 30 new daily routes.

 

The airport’s capacity would increase to handle up to 756,000 flights and 150 million passengers.

 

Heathrow has pledged to consult with airlines, the local community, local authorities, businesses and others from next year, with a planning application expected to be submitted in 2028.

 

Transport secretary Heidi Alexander, making the announcement on Heathrow 24 hours before the Budget, said: “Heathrow is our only hub airport which supports trade, tourism and hundreds of thousands of jobs, underpinning prosperity not only in the southeast but across the UK.  

 

“Today is another important step to enable a third runway and build on these benefits, setting the direction for the remainder of our work to get the policy framework in place for airport expansion. 

 

“This will allow a decision on a third runway plan this parliament which meets our key tests including on the environment and economic growth.  

 

“We’re acting swiftly and decisively to get this project off the ground so we can realise its transformational potential for passengers, businesses, and our economy sooner.” 

 

Chancellor Rachel Reeves added: “We’re taking action where previous governments hesitated, and moving forward with Heathrow’s third runway to drive economic growth, international investment and better connections for our country.

 

“That means opening the door to new growth and opportunity with Heathrow expansion - creating over 100,000 jobs, boosting our economy, and giving businesses and communities the certainty they need to thrive.”

 

Kenton Jarvis, chief executive of easyJet, which announced annual results today, confirmed in August that expansion at Heathrow “represents a unique opportunity” for the budget carrier to operate from the airport “at scale for the first time and bring with it lower fares for consumers”.

 

The British Airline Pilots’ Association (Balpa) welcomed the decision.

 

Flight safety, policy and regulation director said: “The government’s decision to award the contract for Heathrow’s third runway today is excellent news for the UK aviation sector. Expanding Heathrow’s third runway will deliver an extra 276,000 flights to the UK every year, creating new jobs in the air and on the ground.

 

“To really make the best of this opportunity it is essential that the government takes steps now to ensure that we have a pipeline of trained and qualified pilots, ready to crew the new flights when they come online.

 

“At the moment anyone who wants to be a pilot has to invest over a hundred thousand pounds of their own money, without access to student loans, with no certainty of a job at the end. That simply prices too many young people out, who might otherwise be perfectly qualified.

 

“The private sector has stepped up and funded Heathrow’s expansion. Now it’s time for the government   to play their part, to think creatively about the policy changes needed to make pilot training accessible to anyone who wants to fly.”