Heathrow Airport to submit new investment plan to Civil Aviation Authority

December 28, 2019: Heathrow Airport Limited (HAL) will submit a “detailed investment plan” to the UK Civil Aviation Authority (CAA), following the recent confirmation that the operator of London Heathrow Airport will delay the expansion of the gateway for at least 12 months.

The initial business plan, which it intends to hand to the national aviation regulator soon is designed to demonstrate how HAL can deliver expansion, including a third runway – in a programme that is “sustainable, affordable, financeable and deliverable”. It expects to open the third runway between early 2028 and late 2029.

HAL said in a statement, “all requirements of the Airports National Policy Statement, with overall costs in-line with the £14 billion original plan submitted to the Airports Commission back in 2014”.

The statement continued, “The plan has been carefully crafted following engagement with consumers, business groups, local communities and airlines who were asked what expansion should deliver for them.”

Crucially, given the CAA’s reluctance to improve heavy spending before HAL has even been given the full green light to expand through a development consent order (DCO), it is said by the airport operator to include a “rigorously reviewed financial assessment, confirming that Heathrow can expand within the total cost envelope originally submitted in 2014 to the Airports Commission and financed entirely by private money, at no cost to the taxpayer”.

The plan outlines two ‘book-end’ options that focus investment over the next 15 years on either prioritising further enhancement to passenger service, or prioritising more rapid growth to deliver more connectivity and greater airline competition sooner.

“Over the next six months, Heathrow will engage with stakeholders to seek feedback on the plan and which of these two options best meet their priorities. That feedback will be incorporated into a Final Business Plan published in 2020 which will give a clear indication of the path Heathrow will take – either prioritising service, prioritising speed or a blend of the two.

Meanwhile, International Airlines Group (IAG) is encouraging the new UK government formed by Boris Johnson to commission an independent assessment of London Heathrow's expansion costs, as the airport is expected to gain CAA approval to spend hundreds of millions of pounds on early construction costs.

In a press release issued on December 18, the airline group, which owns British Airways and is Heathrow's biggest customer in terms of weekly capacity, with 44 percent of all weekly seats, urged expenditure caution before any planning permission is granted or indeed the full costs are known.

The CAA decision was made before the recent election and without independent scrutiny, as the regulator based its decision on estimates, which have risen by more than 250 percent in the last two years, provided by HAL.