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Are Heathrow’s dreams of a third runway over?

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Last week, I was on the BBC’s World Business Report commenting on the release of Heathrow’s 2023 results. Sadly it isn’t on iPlayer so you can’t check out my living room!

The airport is currently going through a period of change precipitated largely by an almost-full recovery from covid. Passenger numbers reached 79.2 million in 2023, not far off the 80.9 million who passed through the airport in 2019 and a big improvement from a 40-year low in 2021 of 19.8m.

Heathrow also posted its first profit since covid of £38 million, although as this interesting article by Robert Boyle (former Director of Strategy at IAG) points out, Heathrow likes to low-ball its “adjusted” profits.

Heathrow third runway plans

For 2024 Heathrow is predicting a new record with a projected 81.4 million passengers. However whilst passenger numbers are now back to the pre-covid trajectory, there is still some catching up to do on the operational side:

  • overall customer satisfaction remains 3.6% down on 2019 levels
  • missed baggage connections are 0.9% higher than in 2019
  • security waits of five minutes or more are up 3.2% on 2019

Arguably the most significant performance factor is departure punctuality, which is defined as being + or – 15 minutes of scheduled departure. This is down a hefty 15.1% with just 63.4% of all departures going on time. Granted, this is partly down to airline performance rather than Heathrow’s own operations but it remains a significant pinch-point at the airport.

Change isn’t just confined to the pandemic recovery. After a decade-long stint, John Holland-Kaye stepped down as CEO to be replaced by Thomas Woldbye, who comes from Copenhagen Airport. Thomas started his role in the Autumn and has kept an arguably low profile as he takes stock of the situation.

A third runway?

The biggest decision on Woldbye’s plate, of course, is whether to continue the long-term strategy pursuing a third runway.

The elephant in the room is the ownership of Heathrow. Spanish construction group Ferrovial is hoping to sell its 25% stake to Saudi Arabia’s Public Investment Fund and investment fund Ardian – which, in itself, is arguably a sign that Ferrovial believes that the third runway is dead. Under the terms of the shareholders agreement, other shareholders have the right to sell at the same price.

Current feedback is that holders representing 35% of the shares will do so. This would give Saudi Arabia and its investment partner a controlling 60% stake in the airport and may lead to further changes in strategy. Nothing is guaranteed however – it is possible that the Saudi investors may pull out when faced with the need to acquire the additional 35%.

Heathrow third runway plan

The legal challenges of a third runway have largely gone away. In 2020, the Supreme Court overturned a judgement saying that it would be illegal based on the UK’s climate commitments, paving the way for the airport to apply for planning permission.

The airport has yet to do so and the huge cost of the third runway – predicted at £14 billion in 2014 prices – as well as the complexity of the project mean it is not an easy choice. The project would involve demolishing several villages to the north west of Heathrow and tunnelling the M25 whilst keeping it open. BA’s Waterside head office would have to go, as would many of the airport hotels on Bath Road.

It is timely that The Sunday Times reported last weekend that that “Heathrow third runway shelved as airport seeks to be ‘better not bigger’” (paywall).

Citing leaked plans, the article suggests that Heathrow could hit 96 million passengers by 2036 “if all of its initiatives can be realised” without the need for the runway. A “core” case was said to forecast a more modest rise to 86 million passengers.

Heathrow denied the reports, saying:

“The speculation in today’s Sunday Times is wrong, and the plans and actions described are not reflective of our strategy for future growth. Heathrow connects the whole of the UK to global growth, but we’re operating almost at capacity which limits the UK’s economic potential.

Of course we’re looking at how we can optimise the current airport to achieve short-term growth within our current infrastructure. Longer term, we’re reviewing our plans to make sure the airport has the capacity to drive more global connectivity for the UK economy, while boosting the resilience of our operations for our customers, increasing competition for passengers and meeting our sustainability commitments.”

Heathrow third runway plan

How can numbers grow without a third runway?

According to The Sunday Times:

“Among the proposals to increase passenger numbers is a plan to use more buses to transport passengers from the terminal to the aircraft so that planes can be parked further afield. Other initiatives include more efficient use of the runway so that planes could take off and land closer together.

Increasing Heathrow’s annual flight cap from 480,000 to 505,000 is also under consideration, though this would require government consent.”

It’s not clear why bussing people to planes would increase the number of passengers served, because the limiting factor at Heathrow is not the number of gates but take-off and landing slots.

Short of increasing the opening hours of the airport, one of the easiest – and indeed only – ways to increase overall passenger numbers at Heathrow without a third runway would be to increase the size of aircraft that serve it. The airport already sees one of the highest concentrations of very large passenger aircraft, including A380s from BA, Emirates, Qatar Airways, Etihad and more – but there’s still plenty of potential to upgrade aircraft across the airport.

Whilst up-gauging existing flights wouldn’t expand Heathrow’s route network, it would allow more passengers per plane.

For example, if British Airways moved to an all-A321 operation at Heathrow and got rid of the smaller A320s it would increase capacity by 20%. To some extent, this is already happening with BA phasing out the A319 from its fleet and taking a larger portion of A321neos. Other airlines are up-gauging as well.

An increase in passengers would require larger terminal facilities, but that wouldn’t be a problem. There are plenty of opportunities to reconfigure Heathrow’s terminals without a third runway, including extending Terminal 2 over the former Terminal 1, something that is being enabled by the construction of Terminal 2’s new baggage system.

Heathrow third runway

Once an extended Terminal 2 is open you could close Terminals 3 for redevelopment until Heathrow ends up as a ‘toast-rack’ style airport, the most efficient airport configuration. This could involve the total closure of Terminal 4 which sits in an odd position at the south of the complex.

What else is going on at Heathrow?

Whilst Woldbye ponders, Heathrow has started installing the first of 146 upgraded security scanners that mean you will no longer need to remove liquids and laptops from bags.

Whilst Heathrow will not meet the Government’s deadline of June 2024 for the full rollout, it does say there will a “continual roll-out of new lanes in 2024” including in BA’s First Wing and the Virgin Atlantic Upper Class Wing, both of which are currently closed for the upgrades.

Other investment in the airport is set to increase by 25% this year.

Meanwhile, Heathrow’s negotiated passenger service fees are set to decrease by 20% this year as passenger numbers return to pre-covid levels.

The Telegraph reports that Heathrow wants to outsource security staffing, with Heathrow’s chief operating officer Emma Gilthorpe saying that ICTS, a third-party supplier, would be in charge of overseeing it. Trolley and passenger services would also be outsourced. The proposals would save about £40 million.

Whilst Heathrow has assured staff that there would be no job losses, the Unions have threatened strike action. At the moment it’s all rather academic: any potential strikes would require a ballot of members and at least two weeks’ notice for affected dates.

Whatever the future holds, there is never a dull moment where Heathrow is concerned.

Category

General

Comments (152)

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  • BJ says:
    28 Feb28 February 07:16

    Should be IMO, I think the government needs a national airport strategy not a London/free market airport strategy. Measures to rncourage direct international flights from regional airports would benefit regions economy and residents. LHR/London would still benefit too because a reduction in domestic connecting traffic would free up slots for more longhaul flight on larger planes with more passengers. Main loser would be BA unless they chose to become engaged with regional development.

    • NorthernLass says:
      28 Feb28 February 07:40

      I was thinking exactly this. What is this obsession with pushing more and more air traffic through LHR when regional airports are underused?
      My QR flight from DOH to MAN in December was full of pax returning from Asia/ME; BA could easily put on some TA services which would undoubtedly be successful.

      • NorthernLass says:
        28 Feb28 February 07:43

        Also people really don’t want to be lugging their baggage on trains, even if there was a direct service to LHR, it’s just not practical. If the domestic connections were discontinued, many people would choose other destinations/airlines.

        • Panda Mick says:
          28 Feb28 February 08:26

          “If the domestic connections were discontinued”

          This. A million times over. If france, known for its belligerent citizens, can ban flights between cities served by trains, why can’t the UK?

          • Ziggy says:
            28 Feb28 February 08:50

            Possibly (I’m not sure) because the French trains don’t frequently have to offer bus replacement services and because the French trains are quicker.

          • aseftel says:
            28 Feb28 February 09:25

            France has banned domestic flights that can otherwise be done in under 2.5 hours. That would only ban LON-MAN.

          • TooPoorToBeHere says:
            28 Feb28 February 09:27

            The French domestic flight ban is a PR exercise as it was specified carefully to permit most of the important ones to continue.

            Also, the French have (broadly-speaking) a functioning railway system, whereas we do not and are not going to get one.

          • Paul says:
            28 Feb28 February 10:00

            Because they have extraordinarily good trains and they are cheap. Lyon airport to CDG is 247 miles but under 2 hours with fares from 16 Euro. Bracknell to Waterloo is 28 miles and takes 70 minutes at a costs of£15.
            Across the U.K. trains are appalling and overpriced. You need to fix the trains, ban domestic flying and force airlines to use northern airports

          • Bagoly says:
            28 Feb28 February 21:54

            There is also “Connecting flights are unaffected by the new law.”
            i.e. the flights are not banned – only the selling of tickets on them that do not include connections.

          • Mike says:
            29 Feb29 February 19:11

            Based on the current rail network / timetable the shortest journey time between central Manchester and Heathrow is 3 hours 11 min with most journeys closer to 3h 30m. Plus it involves at least 2 different mainline trains and two Tube lines. With luggage. So not remotely comparable to the situation in France

      • BJ says:
        28 Feb28 February 08:20

        MAN would benefit enormously with its catchment area. Read an article lately that indicated there was also 6 figure connecting traffic from Scotland to multiple key destinations so there is easily scope for some expansion here too were action taken to promote and encourage it.

        • NorthernLass says:
          28 Feb28 February 09:06

          People from Scotland, the North East, the Midlands, Peak District, IOM, sometimes even NI enjoy our third-world facilities at MAN!

        • Paul says:
          28 Feb28 February 10:02

          That connecting traffic is mostly packaged holiday makers. KLM LH EK and QR currently deal with almost all premium traffic out of Scotland

      • dougzz99 says:
        28 Feb28 February 10:11

        Within the current free for all there’s simply no interest in Manchester. Airlines use it that can’t gain more LHR slots. BA at present lack the aircraft to run their existing timetable from LHR. They’re not going to take aircraft from Heathrow to base at Manchester. To run efficiently you need a critical mass of flights to provide cover and rebooking options.

    • Bagoly says:
      28 Feb28 February 10:32

      I’d widen that to a National Transport Strategy (which doesn’t mean specifying everything in minute detail, but it does mean thinking how the whole thing is likely to fit together)

  • Robert says:
    28 Feb28 February 07:30

    Heathrow’s potential to expand further has been cut short by so many delays to a new runway that should already have been constructed……Both Heathrow and Gatwick’s potential will be stunted going forward. Gatwick needs a completely new runway not a workaround using the emergency runway…..another lost opportunity

  • Thywillbedone says:
    28 Feb28 February 07:37

    The only decent idea Boris ever had (if indeed it was his!) was for a brand new airport in the Thames Estuary. Point to one single example of the UK’s infrastructure ambition …I’ll wait.

    • BBbetter says:
      28 Feb28 February 07:40

      Coming up with an impractical and unrealistically expensive idea is not an achievement.
      Infrastructure ambitions are there, but stymied by planning approval hurdles and NIMBYs. We spent billions so that HS2 tracks don’t spoil the countryside of shores that vote for tories.

      • Rob says:
        28 Feb28 February 08:25

        Most people don’t realise that HS2 is almost completely tunnelled to Birmingham due to resident complaints. You only get 10 minutes above ground.

        • Londonsteve says:
          28 Feb28 February 14:01

          It’s an absurd additional expense and served to torpedo the line being built beyond B’ham just because so many home owners want to feel like they’re living in a Jane Austen novel. Personally, I’d quite like to look out of my house and see such an amazing train whistling by, it’s not dissimilar to looking up at Concorde flying overhead when that was still a thing and it would be a source of pride. Home owning Tory voting retirees in the Shires however, apparently don’t. I recall once being accosted by just such an individual who virtually demanded me to exhibit my outrage about HS2 ‘devastating’ and ‘raping’ the countryside. They were deeply miffed and visibly annoyed when I couldn’t muster any enthusiasm for their point of view.

          • Andy says:
            28 Feb28 February 16:12

            Pandering to Tory voters, and endless Government delay is why HS2 is so expensive

            Birmingham to Manchester is actually the section with the strongest business case but of course that’s the bit Sunak scrapped

            We need to get on and build HS2 all the way to Scotland

      • BJ says:
        28 Feb28 February 08:29

        OT @BBB, just letting you know I’m very happy with the articles today, perhaps Rob run them all together just for me 😉

    • lumma says:
      28 Feb28 February 07:43

      There’s a pretty fancy new train line running under London in all fairness

      • Qrfan says:
        28 Feb28 February 08:24

        It was 4 years late…

        • lumma says:
          28 Feb28 February 08:40

          The Victoria line was three years late too.

          It’s literally Europe’s biggest infrastructure project this century yet “the UK has no infrastructure ambitions”

          • Rui N. says:
            28 Feb28 February 09:15

            It’s only “Europe’s biggest infrastructure” if you split all that everything in other countries. See what just Paris by itself is doing (between metro and RER) for example. Or the entirety of Spain high speed rail network (all but one line built this century).

      • BJ says:
        28 Feb28 February 08:24

        Been on it, saw nothing particularly fancy about it. I thought it eas just some new bits in a jigsaw puzzle? And look how long it took to complete.

      • Ian says:
        28 Feb28 February 08:59

        It is indeed but disappointing that the trains (which are quite slow, generally stopping at all stations) don’t have toilets. Thameslink trains, introduced years earlier, are much superior in my opinion.

        • Londonsteve says:
          28 Feb28 February 14:11

          Something entirely absent from Crossrail (that you get to see in similar continent European projects, and indeed, to a lesser extent with Thameslink) is the scope for running cross city trains. You can now travel from Cambridge to Brighton with Thameslink, connecting two cities that previously would have required passengers to cross London on the tube travelling between two termini. Instead of nearly all trains terminating in Paddington, they could run through a central core to then terminate in places like Southend and Dover, providing better connectivity to a much wider area of the country than just some commuter towns to the west and east of London.

          What we’ve acquired is a tunnel and tracks that can only be used by dedicated rolling stock (the automated train hardware is only fitted to EL rolling stock and the glass doors only align with those trains). The end result is that it’s a faster way for people that live on one of the three EL tentacles to get into the centre of London, but is not as revolutionary for London travel as the price tag and elegant stations would like to suggest. Don’t get me wrong, there are clear benefits to having it, but it should have been a more generic tunnel giving scope for new possibilities beyond a glorified tube line.

    • Andy says:
      28 Feb28 February 09:50

      Thames Estuary is the wrong side of London, would interfere with traffic to Amsterdam and Brussels, and have more fog days than Schipol

    • BA Flyer IHG Stayer says:
      28 Feb28 February 11:37

      Boris Island was never his idea. He’s never had an idea of his own.

      He was only interested in the airport side of it and ignored the other aspects like how people were going to get to and from it.

      Building the airport was relativly cheap.

      The cost of building a road / rail infrastructure was far, far more costly.

      As was the cost of building all the new ancillary facilities to serve the airport such as warehouses and catering factories etc

      • Bagoly says:
        28 Feb28 February 21:59

        The only way it could work financially would be if LHR was then turned into a new city with lots of housing and retail (and possibly offices)
        I don’t know whether the numbers would work, but it is conceivable that they would.
        And presumably allow all the warehousing nearby (which would otherwise lose its value, so generating opponents) to be converted to residential too (although some of it would work to supply the new city)

    • David Starkie says:
      4 Mar4 March 09:51

      UKs infrastructure ambition….HS2 (£100bn +).

  • John says:
    28 Feb28 February 07:43

    Security staff should be run by the arm of the police / government like in the US – this is crazy driving it to the lowest dime

    • Chabuddy Geezy says:
      28 Feb28 February 08:21

      Ah the TSA: famous for their poor customer service, long lines for security, stealing from passengers and failing to find guns and other contraband brought through their airports.

      • Qrfan says:
        28 Feb28 February 08:30

        The long lines are intentional, or at least a happy accident. TSA, similar to US borders, creates a paid for service that allows you to skip the bulk of the line (pre check). If you don’t pay for it, they don’t care how long you queue for. They’ve also now allowed third parties to offer other paid for services to reduce your queue length. The free queue needs to stay long to drive sales.

      • Ziggy says:
        28 Feb28 February 08:53

        I’ll take the TSA over the (mostly) useless, rude, and bone idle ‘security’ staff at Heathrow T5 any day.

        • Rhys says:
          28 Feb28 February 09:01

          I’d take the much politer UK security staff over the rude, shouty TSA at most US airports any day!

          • TooPoorToBeHere says:
            28 Feb28 February 09:11

            LPL>LHR>US TSA>MAN

          • Qrfan says:
            28 Feb28 February 09:12

            I’ll take the one that reduces the risk of security breaches. Prioritising politeness is ridiculous. I’m no fan of TSA, but the routine ambivalence of the Heathrow staff concerns me far more than a bit of abrupt instruction.

          • Rhys says:
            28 Feb28 February 09:14

            Erm have you seen the figures on the TSA’s performance?! https://abcnews.go.com/US/tsa-fails-tests-latest-undercover-operation-us-airports/story?id=51022188

          • Numpty says:
            28 Feb28 February 09:13

            This. TSA staff are awful! The worst (and its quite impressive) are the green uniformed (army style) immigration staff in Vietnam – do not mess with them! (hope they aren’t reading)

          • Ziggy says:
            28 Feb28 February 09:50

            I guess we have slightly different priorities. With PreCheck I’m through TSA pretty quickly on most occasions. With T5 security, I’m almost always waiting for someone to come back from a break before I can get on with my day. I’ll take shouting + progress over peace and quiet + delays.

          • Rhys says:
            28 Feb28 February 10:23

            I also have PreCheck which is great…but in my experience, Heathrow is generally just as fast? And without PreCheck, TSA is usually MUCH slower.

  • Paul says:
    28 Feb28 February 08:02

    Couldn’t they extend take off times (only allowing for newer quieter planes after a certain time)?
    Even an extra hour a day would increase capacity by a huge amount.

    • Qrfan says:
      28 Feb28 February 08:34

      How much quieter is an a350 Vs a 777 if it’s flying 1000ft over your house at midnight though? I get the whole “the airport was there before most of the residents” schtick but so was the curfew?

      • kiran_mk2 says:
        28 Feb28 February 13:13

        OK, I’m basing this on the BigJetTV Youtube feed (microphone + compression + YouTube compression), but there is a massive difference between the noise from modern 787/A350s and the older 777/767s. Probably not enough for those under the flight path though.

      • David Starkie says:
        4 Mar4 March 10:08

        Bear in mind that many/most houses in the Hounslow, Hillingdon, Staines areas were sound proofed (including ceilings and chimneys) under a special sound proofing scheme in the 1960/70s.

  • Jordan D says:
    28 Feb28 February 08:29

    Once again, the UK shows just how unwilling it is to tackle and build serious pieces of infrastructure. Such a disappointment.

    • Bagoly says:
      28 Feb28 February 10:30

      Arguably even worse is the delay in deciding.
      Back in 2014, we should have had a decision by 2016 whether to build LHR 3rd runway or not.
      Then get on with it, or move on to other ideas.

      • Londonsteve says:
        29 Feb29 February 13:48

        It’s the ‘get on with it or come up with another good idea’ that’s entirely lacking in the UK. The lack of vim and vigour is stultifying. The general public are also partly to blame; they should be engaged, excited (or angry), communicating with their MP, etc. It’s like nobody cares, barring a very small group of people whose homes might be compulsorily purchased or are presently living at the threshold of the proposed runway. I guess people are so used to 20 year planning enquiries and then nothing gets done they just shrug and assume it’s not worth engaging because nothing will ever come of it.

  • Peter says:
    28 Feb28 February 08:34

    We need the planned Thames airport with a high speed rail connection. Got woken up at 7am this morning
    again from Heathrow planes flying over central London, noise and pollution must be horrible further west.

  • Ian says:
    28 Feb28 February 09:01

    Perhaps the simplest way of all to increase LHR’s capacity would be to operate the runways in mixed mode rather than segregated mode. How many times do we see a queue of aircraft waiting to take-off whilst the “landing” runway is available – and vice-versa?

    • jjoohhnn says:
      28 Feb28 February 10:52

      The landing runway is almost never ‘available’. And they do mix mode, particularly in the AM peak. And it’s normal to see throughout the day that you will get a few rogue arrivals on the departures runway to try and clear the queue of arriving aircraft which is usually the problem. Running fully mixed mode doesn’t always provide maximum capacity, sometimes airport constraints can affect this.

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