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The UK government must bring in sweeping reforms to the country’s air travel regulations if it wants Heathrow’s controversial third runway to become a reality, the airport’s chief executive has said.
Weeks after chancellor Rachel Reeves and Prime Minister Sir Keir Starmer threw their weight behind the project, chief executive Thomas Woldbye said the “risks” facing the runway were largely things that could be addressed by ministers.
“This is a huge project, and there are lots of uncertainties and there are lots of risks,” he told the Financial Times. The government needs to commit to reforming Britain’s airspace to fit in more planes, and to make changes to the regulatory model that sets Heathrow’s landing charges, before the project could go ahead, he said.
“Many of the aspects of this, we call them building blocks . . . need to be delivered by government,” he said, adding he is “confident the government can” make the changes needed.
“I think it is now a shared project,” he added. “We heard the minister say [they are] putting all their weight behind it, we will put all our weight behind it. And I think with those two we can deliver it.”
Heathrow executives have also privately suggested they will want clarity on how the government’s planning reforms could smooth the way, including minimising potential delays caused by judicial reviews.
Woldbye said the airport will deliver a “proposal” for a third runway to the government by the summer, including an estimate of how much the project would cost — which he admitted would be “significantly” more than the £14bn estimated in 2014, largely because of inflation.
On Wednesday Heathrow announced plans for a “phased” expansion — starting with multibillion pound upgrades to squeeze more passengers into its existing site — before moving to trying to build a third runway afterwards.
Woldbye said he remains confident in the government’s strong support for the project, after Reeves last month called on the airport to push ahead with its long-planned third runway in a bid to boost economic growth.
Heathrow has said the project would be privately financed, but that its shareholders would expect to recoup their investment through the airport’s landing charges, which are ultimately passed by airlines through to customers in ticket prices.
The current model is set by the Civil Aviation Authority over five-yearly periods, but Heathrow executives believe a far longer settlement will be needed to cover the costs of a third runway.
Any attempt to significantly raise these landing charges would be resisted by Heathrow’s airlines, which have long chafed at the airport’s high fees.
“Heathrow is already the world’s most expensive airport and today’s announcement does not demonstrate where passengers will see value for money,” the airport’s airlines said in a statement on Wednesday.
The Heathrow boss was speaking at British Steel’s Scunthorpe plant, where he committed to using “as much British steel as possible” in the airport’s upgrades and third runway.
But separately on Wednesday it was claimed that the steel industry could end up paying a financial price in the long run for Heathrow’s expansion, if the scheme ends up pushing up the price of emitting greenhouse gases.
The UK’s carbon pricing system requires power producers and some heavy industries to purchase permits that give them the right to emit one tonne of CO₂.
If emissions rise from one sector, such as flying, then the price of permits for other sectors could rise, so as to cap the country’s overall emissions and stay within its overall “carbon budget”.
Alex Chapman, senior economist at the New Economics Foundation, which opposes airport expansion, said significant growth in flying could therefore push up the price of permits for other industries, including steel, chemicals and manufacturing.
“Other sectors lose out if aviation spends the carbon budget,” he told the House of Common transport select committee on Wednesday.
Frank Aaskov, director of energy at UK Steel, told the committee it was logical to assume that if the aviation sector expanded “then because there is a limited pool of allowances there would be an upward impact on price”.
Experts said the impact on other sectors will depend on how much of the aviation industry is ultimately included in the UK’s carbon permitting system — which currently excludes long-haul flights — as well as the structure of the country’s carbon market by the time a third runway is completed.
Ruth Cadbury, Labour chair of the transport select committee, told the FT: “There is no doubt that in a carbon-constrained economy, growth in one sector has implications on other sectors.”
The UK’s current carbon guidance says that “where emissions rise in one sector, the UK will have to achieve corresponding falls in another”.
