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Heathrow has refuted claims that its long-awaited third runway plans have been abandoned, as a leaked new strategy suggested.
A report by The Sunday Times indicated that the Hounslow hub was dismantling its third runway team to explore ways of expanding capacity without increasing its carbon footprint. According to city sources, Heathrow had initiated these plans under the banner of “better not bigger,” a phrase initially coined by anti-expansion activists. The sources cited limited shareholder enthusiasm for substantial spending on a radical expansion of the hub.
Heathrow responded forcefully to the report, with a spokesperson stating, “The speculation in today’s Sunday Times is wrong, and the plans and actions described are not reflective of our strategy for future growth.” The spokesperson emphasized that while operating nearly at capacity limits the UK’s economic potential, short-term growth within the existing infrastructure is being explored.
This development coincides with Heathrow possibly attracting investment from Middle East funds in the UAE, Saudi Arabia, and Qatar. Heathrow experienced a positive year in 2023, overcoming initial challenges to achieve significant service improvements for our customers and turning a profit after three consecutive years of losses,” remarked Heathrow’s Chief Executive, Thomas Woldbye. The profit achievement reliefs the West-London hub, which has grappled with a substantial debt burden and engaged in a regulatory dispute with major carriers over landing charges.
Woldbye noted, “This sets a great platform to build on. However, in 2024, we anticipate delivering even further improved service to more passengers despite a 20 per cent cut in real airport charges. We must strategically optimize our efficiency, making challenging decisions on expenditures and investments to address the substantial cost challenge set by the CAA and sustain profitability over the next three years.”
Heathrow’s return to profit coincides with mounting speculation about potential investment from state-owned funds in the UAE, Saudi Arabia, and Qatar, potentially becoming significant stakeholders in the group.
Saudi Arabia’s Public Investment Fund (PIF) and the Saudi-backed asset management firm Ardian completed a £2.4 billion deal for Spanish infrastructure giant Ferrovial’s 25 per cent stake in the airport in November. Other shareholders are reportedly nearing selling agreements, potentially resulting in the oil-rich nation gaining majority control. Bloomberg reported yesterday that the Abu Dhabi sovereign wealth fund Mubadala Investment Co. is also contemplating an investment in the airport.
