Why London Heathrow Has New Hope For A Third Runway

Like a phoenix from the ashes, the plan to construct a third runway at London Heathrow Airport (LHR) appears to have been revived once more. After decades of prevarication by both UK major political parties, the Labour government, which came into power in July, has declared its support for the project. But will that be sufficient to see tarmac laid this time?

The Labour administration, under the leadership of now Prime Minister Keir Starmer, had previously expressed interest in stimulating a sluggish UK economy, with a third runway at LHR being seen as a potential tool. But it was a vague interest. In December, however, Heathrow Airport Holdings CEO Thomas Woldbye demanded clarity that may have focused government minds and led to Chancellor Rachel Reeves’s declaration of support early this year.

But government backing has not necessarily equated to action. The previous Conservative government made a similar commitment in 2016, yet those plans evaporated during the COVID pandemic.

And Labour’s backing is only the first step in what will surely be a road far longer than the wished-for runway. The next stage will require Heathrow to file a formal application this summer so it can start engaging with the UK’s planning systems. That application will almost certainly prompt legal challenges from environmental groups that will argue the new runway contravenes the country’s legal commitments to reducing carbon emissions. Anticipating this, the government plans to limit the number of times infrastructure projects can be challenged in the courts, but that will not remove legal roadblocks entirely and so questions remain over whether this will be the plan that gets the runway built.

“It seems to me there’s a genuine intent by the government,” JLS Consulting director John Strickland said. “They’ve talked about not just Heathrow but removing planning obstacles. I still remain a believer that Heathrow is an airport worthy of expansion, both for airlines and for the wider economic benefit.”

The airport’s location to the west of London is “in the heart of the most affluent area for point-to-point flights,” Strickland added.

While London Gatwick Airport (LGW) plans to upgrade a taxiway to a second runway that would also allow a significant increase in movements, “It can’t deliver the same profile of customer,” he noted.

Strickland believes, however, that it will take considerable time before the first flights take off from a third runway: “Even if everything fell into place, I couldn’t see it being anything less than 10 years.”

The project also promises to be eye-wateringly expensive, with estimates of £20 billion ($25 billion) or more being mentioned. Not only does it involve the runway, but also new taxiways and a new terminal, as well as the massive undertaking of burying London’s orbital motorway, which runs round the edge of the airport, inside a giant tunnel.

But some believe it will be worth the time and money.

“I would have thought that if it goes ahead, investors will still find it a good investment,” LEK transport practice partner Becrom Basu said. “There’s a lot of pent-up demand there; the airport is running at 95% capacity.”

Basu added that he also believed the usual objections and roadblocks will be overcome this time, noting that the general wider adoption of electric vehicles means that the problem of road pollution will slowly diminish. And LHR already has good rail and metro connections, which are considered “green.”

There may also be a shift in how people are thinking about sustainability and its impact on their lives. “One school of thought is that if people want to fly, they’ll find a way to fly,” Basu said.

Following that logic, people could just opt to go elsewhere if LHR’s third runway is not built. For example, it might mean passengers choosing to fly from a regional airport to connect to long-haul services from Amsterdam Schiphol (AMS) or Frankfurt (FRA). Those route options would not only further diminish LHR’s status as a global gateway but might result in more emissions being expended.

“What this [government decision] does is gives Heathrow more confidence to pursue the process again,” Basu said.

AIRLINES RESPOND

Airlines, meanwhile, have generally welcomed the government’s support for a third runway, but remain wary of the price tag, much of which will be passed on to them in the form of increased charges under Heathrow’s current revenue model.

International Airlines Group (IAG), parent of Heathrow’s biggest operator, British Airways (BA), has taken a cautious line.

“We welcome the government’s support for airport expansion and the [minister’s] recognition of the role of aviation in creating an open and growing UK economy,” IAG chief corporate development officer Jonathan Sullivan said.

“But we need to change the current regulatory model at Heathrow that has allowed it to become the most expensive airport in the world. We don’t need tweaks, but fundamental reform. The last review of Heathrow’s regulatory model was in 2009.”

Virgin Atlantic, Heathrow’s second-largest operator, also expressed concerns.

“We are supportive of growth and expansion at Heathrow, if, and only if, there is fundamental reform to the flawed regulatory model to ensure value for money for consumers, affordability for UK plc and to support a competitive UK aviation industry,” a Virgin Atlantic spokesman said.

The CEOs at IAG, BA and Virgin Atlantic—Luis Gallego, Sean Doyle and Shai Weiss, respectively—emphasized this at a meeting with senior government advisors in early February at 10 Downing Street, the UK prime minister’s official residence.

But a third runway would undoubtedly allow LHR to add much-needed capacity and bring advantages to its key airlines. Speaking at the Routes Americas 2025 conference in February, BA chief planning and strategy officer Neil Chernoff explained that the current two-runway airport constrains BA to practicing a “rolling hub” operation with aircraft coming in and out continuously through the day and evening. A third runway would allow it to operate a more conventional and efficient hub strategy with banks of incoming aircraft that coordinate with outgoing connections. BA and some of its key partner airlines that operate out of LHR might also be able to operate in and out of a single terminal so that passengers do not have to transfer via buses.

For now, at least, the longtime on-again, off-again third runway project seems to be firmly back on. Responding to Reeves’s announcement of support for the 100% privately funded project, Woldbye said LHR “was proud to answer the Chancellor’s call to get Britain building.”

He also confirmed that the multi-million-pound plan would include upgrades to terminals, improvements to passenger experience and greater resilience and sustainability.

“This is vital investment and will ensure Heathrow remains globally competitive and a jewel in the country’s crown; the UK’s gateway to growth.”

It was lofty talk. But it at least recognized that the time for talk is over. If LHR is to maintain its global hub status, a third runway is essential and it’s high time to act.