Podcast: What The Latest Decision On Heathrow’s Third Runway Really Means

After the UK government backed London Heathrow’s in-house plan for a third runway, Routes’ David Casey is joined by ASM’s Edmond Rose and ATW’s Alan Dron to examine what the move means for airlines, net zero targets and whether the 2035 timeline can realistically be delivered.

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David Casey:
Hello everyone, and thank you for joining us for Window Seat, our Aviation Week Air Transport podcast. I'm David Casey, editor-in-chief of Routes. Welcome aboard. On this episode, we're taking a closer look at the latest twist in the long-running saga of London Heathrow's proposed third runway. This comes after the UK government confirmed that Heathrow Airport Limited's Northwest Runway Scheme, which is a 3,500-meter strip built over a newly tunneled section of the M25 motorway, which is part of a wider $65 billion expansion, is the preferred option to shape the UK's updated airports national policy statement. Ministers want this policy work wrapped up in time for a planning decision before the end of this Parliament, most likely in 2029, with the aim of seeing a new runway in operation around 2035, if everything stays on track. But as ever with Heathrow, things are far from straightforward.

A rival lower-cost proposal from the Arora Group is still in the mix, while environmental campaigners continue to argue the plans are incompatible with the UK's net-zero commitments. Local communities and legal teams are already preparing for the next phase of objections. So to make sense of all this, I'm delighted to be joined by Alan Dron, Europe and Middle East correspondent at Air Transport World, who's been covering Heathrow and UK aviation policy for years and has the scars to prove it. And by Edmund Rose, consulting director at ASM, who previously served as director of airline planning at Virgin Atlantic and was the CEO of Airport Coordination Limited, which is Heathrow's slot coordinator. So between them, they've seen just about every twist in the Heathrow story.

So, Alan, Edmund, thanks so much for joining me. Alan, before we get into the detail of what ministers have decided this time, I think it's probably worth reminding listeners, especially those outside of the UK, just how long this debate has been going on. Heathrow runway expansion has been proposed, reviewed, scrapped, revived, litigated for the best part of half a century. To start us off, how did we get to this point, and why has Heathrow expansion proved so difficult for successive governments?

Alan Dron (02:22):
Well, David, as you well know, we've been here many, many times before. In your introduction, you mentioned the word "saga," and frankly, the old Viking sagas covered rather shorter timelines than the attempts to get a third runway installed at Heathrow. The basic underlying problem is that the UK is a very small piece of real estate. You have a population just short of 70 million people crammed into roughly the same area as Wyoming. And unlike the state of Wyoming, there's not a lot of wide-open space in the UK. The southeast of England in particular is extremely densely populated, and you can't throw a cricket ball without hitting a historic building or a site of outstanding natural beauty. So, sticking an extra runway anywhere in southeast England is extraordinarily difficult.

Believe it or not, a third runway for Heathrow was suggested as far back as 1946 when the original development plan for Heathrow was unveiled. The first more recent suggestion to stick a third runway there was made in 2003. And despite ever-increasing congestion at Heathrow since then, no UK government has ever had the nerve to really grasp the problem. So where are we today? The announcement by the Secretary of Transport, Heidi Alexander, notably does not say, "Get the bulldozers fired up." No, no, no, no, no. That would be far too easy.

What she said is that Heathrow Airport's own proposal for a third runway “will shape a review of the airport's national policy statement (ANPS), which is the framework within which the planning decision on expansion of the airport will be made. Any amendments to the ANPS will be subject to consultation next summer.” The next bit's particularly interesting, still quoting: “Selection of the scheme to inform the remainder of the review does not represent a final decision on a third runway scheme or design. Any amendments to the ANPS will be subject to consultation and parliamentary scrutiny next year. Details such as the length of the runway, layout, associated infrastructure implications will continue to be considered.” So if anyone thinks that this decision is going to mean the third runway is coming anytime soon, let's just say I've got a nice bridge I could sell them.

David Casey (04:31):
So essentially, if we strip this down to the fundamentals, are we seeing any meaningful progression here, or is this, as you've suggested, Alan, just another step in a very long road that may ultimately not get delivered? What do you think, Edmund, about the progress that has been made in recent weeks?

Edmund Rose (04:49):
Yeah, I feel like it's getting to the point where an overall framework for airport infrastructure is decided, but we're not actually at the decision point. As the statement from the Secretary of Transport said, it has to be consulted in Parliament, and once you've got that framework, you still then have to go through the process to get actual permission to do the work, and that will be lengthy and also involve a lot of stakeholders. So, several years still from the classic bulldozers on the ground or concrete being poured, which is why all the information talks about 2035—that's 10 years away. I don't think we're talking about construction. If it all goes according to plan, if it happens, that's not going to happen until the end of this decade to meet that 2035 target ambition, shall we call it.

David Casey (05:45):
Let's then discuss a little bit about the choice that the government was actually weighing to inform the ANPS, because there were two very different approaches towards unlocking extra capacity at Heathrow. On one hand, we had Heathrow Airport's own in-house plan, and that was the one that the government is backing—the 3,500-meter runway built over the tunneled section of the M25, also tied in with that as a new T5X terminal. On the other hand, we had the Arora Group, which proposed the Heathrow West scheme that was billed as a lower-cost alternative that centered on a shorter 2,800-meter runway, and it was positioned without the need to divert and tunnel the M25 motorway, which the developer argued cuts cost, complexity, disruption, and so on.

Now, the government has ultimately said that the Heathrow Airport plan is the most credible and deliverable option, and it will position the airport essentially future-proofing it for the next generation of long-haul aircraft. But Edmund, with your airline planning experience and your consultancy perspective, when you look at the two bids—one longer runway, more expensive, but probably a lot more developed; one cheaper, maybe less disruptive, but offering a shorter runway and a different operating model for Heathrow Airport—why do you think the government has made the call that they have?

Edmund Rose (07:09):
So it's interesting the word they use is "deliverable" because neither of these projects is completely straightforward as an infrastructure project. But you mentioned one of the particular difficulties of the Heathrow Airport Limited proposal, which is it's not just putting the M25 in a tunnel; it's building a new section of the M25 in the tunnel and then closing the old one, but joining it all up. So just from an infrastructure point of view, these are very complex things.

For both projects, there are some difficulties. I suspect it has more to do with, as the government said, the maturity of Heathrow Airport Limited's plans, which have been worked on extensively and are developed from plans which were largely the same before the pandemic and on which they had spent a great deal of money to get them to that position. So, I suspect it has at least partly to do with the maturity of the planning and therefore the estimates of cost and deliverability.

Well, the airport itself has delivered major infrastructure projects in the past—T5 and then T2—so it does have a history, whatever the cost implications of delivering. So I think all those things are weighed in the balance. From an airline planning point of view, the fact that the Heathrow West option had a smaller runway—a shorter runway—from a pure airline planning point of view, it's fine because the existing two runways are perfectly capable of handling the very small number of movements that really do require more than 2,800 meters.

So from a pure planning perspective, it's not a problem, the idea of a shorter runway. From a flexibility point of view, it is difficult because you lose some flexibility, and from the point of view of a potential noise impact on communities, the 2,800-meter runway option does limit, again, flexibility to give noise relief to communities. So perhaps—and I have no knowledge of this—the government had that in mind too.

Alan Dron (09:18):
I wonder, Edmund, if to me it seems that this is a classic case of, in military terms, "the best is the enemy of the good." I mean, with the Arora scheme, you could have had perhaps 80% or 90% of the capability of the Heathrow plan, but at significantly less cost and rather less complication.

Edmund Rose (09:39):
And the reality is that the movements that are going to be generated by this new runway probably will largely be new short-haul movements because Heathrow already has a much greater preponderance and proportion of long-haul flying—which may need a longer runway—than any of its competitors in Europe. And actually, where it falls short is in short-haul connectivity, where you don't need a terribly long runway because the aircraft are not flying at the limit of their range and they're designed for shorter runways. So yes, I think you're right.

David Casey (10:16):
We have heard that Heathrow has talked up the need for long-haul and ultra-long-haul capability. I think they've said that the 3,500-meter runway will unlock about 30 new international destinations. Are you saying then that the real constraint here is more about short-haul capacity?

Edmund Rose (10:33):
Well, it's total numbers of movements. I think Heathrow has lots of long-haul movements. It has more long-haul movements than, I say, any of its competitor European airports by quite a measure. Where it doesn't do so well is in those short-haul flights that connect with the long-haul and also supply the capital of an island nation. Let's remind ourselves that, yeah, we can take the train to Paris and Brussels and Amsterdam, but for anywhere a bit further, it's less practical. So we need the short-haul flights rather than massive amounts of new long-haul ones.

David Casey (11:09):
In terms of reaction then from airlines to the overall plans, I think it's probably fair to say that it's been cautious at best. I think airlines want more capacity at Heathrow, especially those who probably feel they've been locked out in the past. I'm thinking about easyJet. More slots, in theory, should mean more competition and more choice. But on the other hand, we're hearing that airlines are deeply concerned about cost. Heathrow, as we know, already has some of the highest airport charges in the world, and I think both British Airways and Virgin Atlantic have warned repeatedly that a third runway at the scale and the capital expenditure that's been talked about risks pushing those charges even higher. Alan, from your reporting, how would you characterize airline reaction so far? Are carriers supportive of the decision, or is it that caution?

Alan Dron (11:57):
They're undoubtedly cautious. I mean, as you say, they would love to have more capacity at Heathrow because, as you well know, Heathrow has operated at close to 100% capacity for years on end. So only a very small hiccup can result in hours of knock-on delays. So yes, they certainly would like more capacity, but as you're well aware, they've said consistently over the years, particularly British Airways, whose home hub is Heathrow, that they're appalled by the scale of the costs of the proposed Heathrow runway. They argue that Heathrow Airport Limited, the operators, are gold-plating the whole project and that it's significantly more expensive than it needs to be, and that that cost is, in one way or another, going to get passed onto them. It may get to the point where they simply can't absorb that cost, and it'll be handed on in the form of more expensive fares to passengers. So I think, yes, they certainly like capacity, but they're pretty cautious about how the airport's going to go about getting that capacity.

David Casey (13:07):
And how do you read the atmosphere, Edmund? Do carriers see this as a big opportunity or something that could turn into that financial and operational burden, as Alan suggested?

Edmund Rose (13:15):
So I think the big question is how seriously a low-cost carrier would take the ability to operate at Heathrow. And I can recall, again before the COVID pandemic, there was a period where easyJet talked about having some sort of base at Heathrow, and we've heard some words from easyJet in the last week suggesting some interest in that. And if that is the case, and genuinely you bring in a greater degree of particularly low-cost carrier competition, then what you would see is some stimulation, absolutely, of traffic. You'd see some lower fares. But actually the balance on the low fares the low-cost carrier could bring would be that the overall cost per passenger is likely to rise because there is a huge investment to pay for. And I don't think we're going to see passenger numbers shooting up suddenly to the extent that it would cover the capital costs of all that.

So, it's quite a complicated mix. I think you also have to bear in mind that the London market is big and grows, and indeed more runways at Heathrow could enable better hub planning for the hub carrier, British Airways. So it could increase its connecting traffic. But for the London market itself, if you increase the number of passengers using Heathrow, there comes a point where it's taking some demand away from the other airports in the London area and possibly even outside the London area.

David Casey (14:42):
And it comes at an interesting time, of course, because [London] Gatwick has just got approval to bring its northern runway back into use. That's a £2.2 billion scheme, and I think that'll propel Gatwick to what they're saying is 18 million passengers a year. So in terms of that competitive dynamic between two big London airports, does Heathrow's expansion then undercut Gatwick's pitch to airlines perhaps? Or do you see maybe airlines will increasingly specialize Gatwick with leisure and maybe LCCs and Heathrow remaining as that long-haul hub?

Edmund Rose (15:17):
So I think if you go back, certainly Gatwick was known for many years as a leisure airport and promoted itself that way. The difference now is that it has attracted more other services. There's a question to the degree to which the services it has attracted are really wanting to be at Gatwick or whether they're wanting to be at Heathrow but can't get in. Nonetheless, they've had a great deal of success in attracting long-haul carriers, and I think some of that inevitably should stick.

So in a way, I wonder if it's really about a race—that if Gatwick can get its northern runway in use relatively quickly, then it has, if you like, a first-mover advantage, and that may make more traffic stick at Gatwick. By building that successful airport, that won't all then move to Heathrow if and when the Heathrow third runway is built.

David Casey (16:16):
Before we wrap up then, I just wanted to talk a little bit more about the environmental angle because I think that's going to be a defining issue on the Heathrow expansion, and it's probably going to be the central battleground that we're going to see in future legal challenges. The government has said that there's going to be four tests the expansion must meet: supporting economic growth, complying with air quality rules, managing noise, and aligning with climate obligations.

However, environmental groups have taken a very different view. Friends of the Earth described the third runway as essentially bolting on an airport the size of Gatwick onto Heathrow and saying that even with the most optimistic projections for SAF and more efficient aircraft, the scale of emissions from an expanded Heathrow is fundamentally incompatible with the UK meeting its net-zero objectives. Is this going to define, do you think, whether this runway gets built? Based on past court cases, are environmental concerns and noise going to become the main legal angle of attack?

Alan Dron (17:19):
I think it almost certainly will. I mean, this project is going to be challenged in the courts by environmentalists, and if they lose, it'll be appealed and appealed and appealed again, I suspect all the way up to the UK Supreme Court. Now, how long will that take? No idea. Frankly, the British legal system is not noted for its swiftness.

You also mentioned earlier, David, the fact that the timescale for this project is really quite startling. They're only hoping to have the consent decision for the new runway in place before the end of the current Parliament, which is 2029. That's four years away. And what happens if a different government takes power in 2029? All the current British opinion polls say that will happen because people are so hacked off with the main two parties. There's an insurgent party called Reform, which, if there was a general election tomorrow, would not only win a majority, it would win an absolute majority in the House of Commons.

Would that new government—or even if it's a hung Parliament in 2029—continue with the project, given that it's pretty unlikely that the construction will actually have started by then, which gives them a perfect excuse to cancel it if they're that way inclined?

David Casey (18:38):
Edmund, do you want to come in on that as well then? Maybe from an airline perspective, if you were advising a board on fleet planning or route strategy, long-term decisions, what date would you tell them to bank on privately? Do you see 2035 as something that is achievable? Do you see it late into the 2030s or even beyond that?

Edmund Rose (18:58):
So it is theoretically possible to achieve 2035. I haven't seen or examined the very detailed plans for how you get to 2035, but it sounds about right. You have your consent order by 2029, and then you allow six years for capacity purchase of properties and actual construction. That sounds possible.

But if I were a fleet planner, I would be building in maximum flexibility in my fleet to flex because I wouldn't hang my hat on 2035 as a date, and I would make sure that I had lots of options for taking new aircraft but also aircraft that are easily disposed of at that point if the runway doesn't happen.

David Casey (19:45):
Okay. Well, Alan, Edmund, thank you both. I think that was a really insightful conversation, and we've managed to cover some of the major angles there behind the latest twist in the Heathrow saga. So, thank you to our listeners for tuning in, and a big thanks as ever to our producers, Guy Ferneyhough and Cory Hitt. If you enjoyed today's discussion, please like and subscribe to Window Seat wherever you get your podcasts. Until next time, this is David Casey disembarking from Window Seat.