Hotel tycoon Arora launches revamped Heathrow runway proposal
The hotel tycoon behind a rival bid to build Heathrow’s third runway has tabled a fresh proposal backed by British Airways and Virgin Atlantic that would build the mega-project in two distinct stages in an effort to keep a lid on costs.
Surinder Arora, the billionaire hospitality magnate behind a campaign to reshape Heathrow’s regulatory model, has proposed a phased approach to building the new runway that would initially focus on a new terminal and a shorter, 2,400m runway – avoiding the M25.
His Heathrow West project would then extend the runway to its full 3,500m – and reroute London’s main ringroad – should ministers still wish to plough ahead with the full expansion.
The two-phase approach would bolster the mega-project’s chances of being operational in time for the 2035 deadline set by the government, Arora said. It would also lower the risk of the project being defined by the same cost overruns that have blighted almost every large infrastructure project that Britain has built this century.
Arora’s hopes to become the first external party to oversee a project at London’s main hub was dealt a blow last November, after the government opted to proceed with the design tabled by the airport’s owner Heathrow Airport Limited (HAL). But an update from the aviation watchdog last week revived Arora’s bid to oversee the ambitious expansion, ruling that alternative bidders should be allowed to pitch for and operate any new infrastructure at the hub.
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“We have committed significant time and resource to producing our latest plans to ensure that they are highly credible, in line with the government’s objectives and offering better value to airlines and passengers,” Arora said. “We will continue to engage fully with airlines and other stakeholders as we prepare to submit for planning.”
Heathrow West’s proposal has already earned the support of some of the airport’s most influential customers, including British Airways-owner IAG and Virgin Atlantic. Swissport and Iata, the world’s largest aviation industry body, have also come out in support of the phased approach, hailing the plan as being the best current model for keeping the expansion “deliverable, financeable and affordable”.
Luis Gallego, chief executive of IAG, said: “The two-phase approach proposed by Heathrow West is a credible option, with the potential to cap costs for passengers and deliver the benefits of expansion as soon as possible for the UK. We think it is worth further development and should be carefully considered by the UK government.”
Virgin Atlantic boss Corneel Koster said the bid was “credible” and urged ministers to weigh it as a viable option.
The breadth and depth of the proposal’s industry support will come as a blow to HAL, the hub’s incumbent operator, whose 3,500m proposal won ministers’ initial backing in November. But the airport has since faced a mounting backlash over its fees, which are already among the most expensive in the world and are poised to double in order fund its version of the third runway expansion.
IAG has called on costs associated with the expansion, which will be among the largest infrastructure projects in Britain, to be capped at £30bn. Baggage handler Menzies has also hit out at Heathrow’s current model, telling Morning Wire last month that its cost structure, service and operational reliability were “outliers when compared to our experience at other international hubs”.
A spokesman for HAL said: “We are continuing to engage with our customers and other stakeholders as we develop our expansion plans. A phased approach is not a new idea and similar proposals to those which are being proposed have been reviewed previously.”