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Heathrow airport is exploring ways to cut the cost of its multibillion pound expansion plan, including whether to build a shorter third runway than originally planned.
The airport is preparing a detailed proposal for a third runway to present to the government by the summer, after chancellor Rachel Reeves threw the government’s weight behind airport expansion in a bid to boost economic growth.
As part of the process, Heathrow’s management is reviewing whether it should make changes to its previous expansion blueprint to cut costs, people familiar with the matter said.
The previous master plan was costed at £14bn in 2014 prices, but was shelved in 2020 when the pandemic struck. A hugely ambitious project, it involved diverting the nearby M25 motorway into a tunnel, demolishing 750 homes, a primary school and an energy plant.
Heathrow’s management have said they would like to stick with this “north-west runway” plan, which has been through years of scrutiny and preparation.
But the airport is considering all options before making a final decision, one of the people said. One option would be to still expand to the north west, but to build a shorter third runway to avoid the need to divert the M25 motorway through a tunnel.
The airport is exploring whether this option is feasible, the person said. One problem is that it could give the airport less operational flexibility, as some aircraft might not be able to use it, depending on its length.
The north-west runway was the preferred choice of the government’s 2018 Airports National Policy Statement, and making material changes to it could add years to the project if the ANPS has to be rewritten.
Since the plan was shelved in 2020, Heathrow has hired a new chief executive and undergone a significant change in ownership, and it is natural that the new leadership would want to fully understand its options before undertaking a hugely expensive project, one of the people said.
Last month Heathrow set out proposals for a “phased expansion programme”, which will start with improvements to its current site but ultimately “lay the groundwork for a third runway”.
The airport has said it will only proceed if the government also agrees to reform planning rules, airspace and the airport’s financial regulation.
“The government has been clear, expanding Heathrow will bring huge economic benefits to the whole country. We are looking at our plans for how to deliver this privately funded project and will present them to the government this summer,” Heathrow said in a statement.
Under the current regulatory model, Heathrow is allowed to recoup spending on airport improvements through the landing fees it charges airlines, which are typically passed on to customers through ticket prices.
Airlines led by British Airways owner IAG and Virgin Atlantic have launched a campaign to persuade the Civil Aviation Authority to review how Heathrow is funded, amid fears over the final costs of a third runway.
The head of Emirates airline has also warned that Heathrow’s plans for a third runway could face a legal challenge if airlines were forced to pay significantly higher landing fees in order to finance it.
