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Analysis | Who is really fighting for Heathrow?

Heathrow

Heathrow is a go. But who is now really pushing to get this thing built?

Come 2025 Heathrow’s third runway will be open for business. Between then and now upwards of £20bn will be spent making it happen. It’s a massive project with huge logisitical, legal and environmental challenges.

Many people could be forgiven for putting it in the too hard box; for taking the cynical view that it will just never happen.

So what now? Who is now really pushing to get this thing built? Is Heathrow?

After all, for all its high-volume insistence that it is cracking on with urgency, it could be argued Heathrow has really already won. Government has slapped down its main rival (see box) and seen to it that west London retains its monopoly position as location of the south east’s only two runway airport. Heathrow’s steady, long-term revenue stream is secured. Why does it need to take on the risky expense of building a third runway?

And what’s the return on all that risk anyway? Heathrow, like all airports in the UK, is tightly regulated with the price for using its facility passed on to the consumer via the airlines through landing charges. These landing charges will have to rise to cover the cost of the third runway, much to the displeasure of the airlines – and ultimately, perhaps, the consumer. But just how much these charges are allowed to rise is completely unknown. Government, even in giving Heathrow its backing, was at pains to warn this would not be “expansion at any cost”.

The Civil Aviation Authority as economic regulator will have a huge job on to broker a deal that satisfies both Heathrow’s investors who want a decent return on a high risk investment and the airlines who are already baulking at paying Heathrow some of the highest landing charges in the world.

Heathrow is vociferous in asserting that it is commited to construction. Indeed, its project leaders are really pushing the message that it now needs the construction industry to get behind it. And there are plenty of reasons why. British businesses of all sizes would benefit from expansion from day one, says Heathrow’s development director Phil Wilbraham.

“This decision means the economic taps will be turned on and the British supply chain will benefit,” he says. “We will sign the first contracts within the coming days and week, beginning the process of injecting tens of millions in to the British supply chain and supporting jobs across the UK. This will be the first stage of delivery for Britain’s new runway.”

So it’s message is clear. Get on board and support delivery.

But will it? Does the civil engineering industry even really want see construction start? With multiple legal challenges in the offing and a hugely complex planning submission to produce there’ll be some good money for consultants on offer over the years to come – and there’ll even be some fee-based money too for contractors engaged early to support the design process. And maybe that’s OK – in an industry built on 1% margins, there’s far more profit to be made in not building things these days.

So who does really want this? Business groups do. And with figures that show the cost to the economy of doing nothing in the region of £50bn to £65bn over the next 60 years it does sound like a good outcome. But who is really fighting for it? Is our industry?

What now for Gatwick?

Government didn’t make one decision this week. It made two. For while it said yes (in principle, with multiple conditions) to Heathrow it also gave a categorical no to Gatwick.

The force by which it slammed the door on Gatwick came as quite a surprise, given that the smart money was on government giving both the nod. But Gatwick scarcely got a mention in the official statement, with transport secretary Chris Grayling merely saying he wished it “continued prosperity”.

It is argued by some industry commentators that if government really wanted to see the south east of England get another runway in the near future it would have backed Gatwick.

Gatwick’s new runway would be built on green-field site that it has already acquired and with local authorities and communities largely on board, its chief argument was that it was the obvious spades in the ground choice. Heathrow, it and others have argued, is by contrast a technical, logistical and environmental nightmare.

  • What do you think? Will Heathrow’s third runway be delivered? Add your comments below or email your.view@nce.co.uk

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Readers' comments (2)

  • Does Manchester not have two runways?

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  • Quite right! Duly amended.

  • Michael Thorn

    Further expansion of Heathrow makes no sense. A procession of aircraft climbing or descending over the centre of a densely populated capital city is a risk for disaster that should be diminished rather than increased. The hinterland access to Heathrow is already over-loaded and congested: one presumes that the cost of increasing this capacity is going to fall on the national tax-payer. Heathrow is a nightmare airport that most of us try to avoid. In the dissolution of the BAA airports into independent companies we have lost sight of a national strategy, including development of the major regional airports: we don't all live in the Metropolitan South-East!

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