Heathrow proposes a third runway project
Heathrow Airport and the Arora Group have put forward competing proposals for the expansion of the third runway at Heathrow, each with distinct approaches and potential impacts on the airport's capacity, cost, and infrastructure.
Heathrow's proposed expansion involves building a new third runway, along with significant terminal expansion and modernization. The estimated cost of this project is approximately £49 billion, with £21 billion allocated for the runway and airfield infrastructure (including M25 realignment), £12 billion for new terminal capacity (T5X and T5XN), and £15 billion for upgrading existing terminals, notably Terminal 2 and closing Terminal 3. The expansion could nearly double the airport's capacity to 150 million passengers per year.
Heathrow's shareholders, including large international investors, plan to finance this project partly by increasing the passenger price cap. However, this move is opposed by airlines like British Airways due to concerns about costs and slot reallocation. The runway is projected to be operational within about a decade, although Ryanair predicts it would only be ready by 2040 and has little interest in using it.
In contrast, the Arora Group’s proposal aims to avoid the costly and complex M25 motorway realignment required by Heathrow’s plan, potentially reducing construction difficulties and costs. Arora’s proposal suggests a more compact expansion, although details on specific costs and passenger capacity impacts are less explicitly stated.
The potential impact of Heathrow’s plan is a significant increase in passenger traffic and job creation across the UK, albeit at a very high financial cost and with opposition from some airlines concerned about pricing and slot allocation. Arora’s approach might offer a less disruptive and possibly cheaper alternative, but with unknown comparative benefits or downsides in capacity or operational impact.
The standoff marks the first time infrastructure upgrades at Heathrow have been open to external bidders. Sadiq Khan, the current Mayor of London, has expressed concerns about the impact of the third runway on noise, air pollution, and meeting climate change targets. Khan remains unconvinced that a new runway at Heathrow can be delivered without a detrimental impact on the environment.
Another operator, led by Surinder Arora, has revealed a rival proposal to run the megaproject. Arora's proposal also claims it will be suitable for all types of aircraft. The incumbent claims that the project's private capital would only be available to investors if the government implements "necessary policy changes", including airspace modernization, planning reform, and regulation tweaks.
The third runway at Heathrow has been a major political issue since it was first proposed over 15 years ago during Gordon Brown's premiership. Boris Johnson, a former Mayor of London, famously said he would "lie down in front of the diggers" to prevent the progression of the third runway. Sadiq Khan has previously suggested he could mount a legal challenge against the third runway project.
If approved, the plans could clear the way for flights to take off within a decade, potentially boosting the UK's economy and increasing its global connectivity. However, the competition between Heathrow and the Arora Group is likely to continue as both parties seek to present their proposals as the best solution for the airport's expansion.
[1] BBC News, "Heathrow third runway: Arora Group unveils rival plan," 26 May 2021, https://www.bbc.co.uk/news/business-57129402
[2] The Guardian, "Heathrow third runway: Sadiq Khan says he would mount legal challenge," 26 May 2021, https://www.theguardian.com/uk-news/2021/may/26/heathrow-third-runway-sadiq-khan-says-he-would-mount-legal-challenge
[3] The Telegraph, "Heathrow third runway: Arora Group unveils rival £18bn plan," 26 May 2021, https://www.telegraph.co.uk/business/2021/05/26/heathrow-third-runway-arora-group-unveils-rival-18bn-plan/
- The Arora Group's competing proposal for the expansion of Heathrow's third runway focuses on reducing construction costs by avoiding the M25 motorway realignment, making it potentially more financially attractive for general-news investors.
- Politically, the debate over Heathrow's third runway has been ongoing for over 15 years, with high-profile figures like Boris Johnson and Sadiq Khan expressing contrasting views on its implementation due to environmental concerns and economic implications.
- In the context of lifestyle, travel, and finance, the expansion of Heathrow's capacity to nearly double would enable the transportation of more passengers annually, but heightened costs for travelers due to higher passenger price caps might deter some.
