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BBT March/April 2018
March/April 2018
For Business, Corporate Travel & Meeting Buyers & Arrangers

Heathrow reveals plans to cut third runway costs

Heathrow airport

Heathrow is proposing changes to its plans for a third runway that could save around £2.5 billion from the estimated cost of the project.

The airport said that these savings on the current projected cost of £16.5 billion could be achieved by repositioning new facilities above existing buildings at Terminals 2 and 5 rather than constructing an entirely new terminal.

Money could also be saved by the introduction of new technology that will reduce the amount of terminal space needed to process passengers “without compromising experience”.

Additionally, Heathrow added that terminal capacity could be added more slowly or “incrementally” through a phased construction process to “better match growing demand”.

The airport said this revised £14 billion plan could be delivered “without compromising on Heathrow’s local commitments or passenger experience”.

Further details of these proposals will be published as part of a public planning consultation into the third runway in January.

Heathrow said the changes had been developed “in close co-operation” with airlines and, if approved, meant that airport charges would be “staying close to today’s levels”.

The government is planning to hold a vote in the House of Commons during the first half of 2018 to approve the policy of allowing Heathrow to build a third runway in preference to a second runway at Gatwick.

Emma Gilthorpe, Heathrow’s executive director expansion, said: “The secretary of state [Chris Grayling] set us the challenge to deliver an expanded airport for Britain with passenger charges staying close to current levels.

“We have now identified potential savings of £2.5 billion and are increasingly confident we can meet the affordability challenge.

“We are looking forward to presenting detailed options on how to do it in our consultation in January, and while we will continue to work to reduce the cost of expansion, we will not compromise on our local commitments.”

Despite these cost-cutting proposals, British Airways' owner IAG has urged the government to "provide a detailed breakdown of its expansion costs to ensure airlines’ customers are not ripped off".

IAG’s chief executive Willie Walsh said: “It’s unacceptable that a monopoly can charge these prices without having to explain why. Heathrow’s project costs frequently increase substantially from their original budget without any justification. No one using Heathrow knows what they are paying for, how can that be right?

"Heathrow is already the most expensive hub airport worldwide and risks becoming a European white elephant if costs spin further out of control.

“The government must protect consumers by putting a cap on what they pay to use Heathrow. Charges should not increase from today’s levels if the airport is to have a future."

 

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