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Heathrow expansion details delayed by cost cutting

heathrow 17581396798706 Cropped

Heathrow’s attempts to shave £6bn from its £17bn expansion plans have pushed the project back until at least December, as potential strike action adds a new threat to expansion.

Heathrow was originally due to publish its expansion plans, including details on how the runway will bridge the M25, in the summer.

But according to a report by the Civil Aviation Authority (CAA), following an agreement with major airlines Heathrow will now publish information on expansion “no earlier” than December.

Airlines including British Airways have expressed concerns that part of the high expansion price tag could be passed on to customers through higher landing charges.

“The airline community has said affordability remains their primary concern and they still require more confidence that the emerging features of the scheme design are affordable,” stated the CAA in the report.

“They also want [Heathrow] to make available more mature information/data on costs and benchmarking before Consultation 1 [the consultation]. More generally, they consider there is a lack of early visibility on the material that will be included in Consultation 1.”

The CAA added that Heathrow needs to better co-ordinate its expansion plans.

“As the scheme development process matures, with almost one year since the government’s announcement of Heathrow as its preferred location for capacity expansion, it is becoming increasingly clear that key areas of the programme need to be better co-ordinated to enhance effective and meaningful engagement.”

Heathrow’s expansion timeline has already been delayed: MPs were due to vote on expansion in Parliament this winter but this has been pushed back to the first half of 2018.

As part of its expansion cost-cutting drive, Heathrow is reportedly considering axing an underground passenger transit system linking the proposed Terminal 6 with existing terminals. Other stakeholders have offered their own plans: hotel chain Arora Group has partnered with Bechtel to produce an alternative expansion plan which it says could be £6.7bn cheaper that Heathrow’s current proposals.

The CAA said it was interested in developing Arora Group’s alternative plans.

“We understand that some airlines have been engaging with Arora and are interested to explore whether aspects of Arora’s plans can be taken forward. We have also met Arora and explained it can respond to our consultations on the regulatory framework for HAL, alongside other stakeholders.”

Meanwhile Heathrow has warned its staff that proposed strike action over holiday pay could damage its bid for expansion. In a letter seen by New Civil Engineer, Heathrow said it was activating contingency plans after Unite announced it was formally balloting members on a strike.

“This ballot and the threat of strike action is reputationally damaging to our airport,” says the letter.

“It brings uncertainty to our colleagues, passengers and airline partners and threatens our ability to deliver objectives such as expansion.”

A spokesperson for Heathrow said: “Our expansion plans remain on track for delivery and as the Secretary of State confirmed just last week, Government will look to give Heathrow expansion formal go-ahead. We remain on track to build an expanded Heathrow and deliver a once-in-a-generation boost for our economy, in a way that is affordable, deliverable and with less impacts on our local communities.”

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