UK Finance Minister signals support for London Heathrow Airport’s £33 billion runway expansion

UK Finance Minister John Healey has publicly reiterated his support for the construction of a third runway at London Heathrow Airport. Speaking at the International Monetary Fund Annual Meeting in Bangkok, the Chancellor underlined the growth potential that the new runway would unlock.

He told reporters that the third runway “has always been a case for growth,” adding that the consultation process is “closed, led by the Transport Department.”

“We’re reviewing those, and then further decisions and announcements will follow,” he continued.

Heathrow’s controversial expansion plan has been on the table for years, though a lack of political support has blocked its progression. Heathrow Airport is currently capped at 480,000 flights a year. A third runway would bring this to up to 720,000.

A lack of space around the airport makes capacity growth particularly challenging. Estimated to cost roughly £33 billion, the new runway would require the busy M25 motorway to be rerouted through a tunnel and hundreds of homes demolished. With the associated infrastructure changes, the price tag rises to £49 billion.

The Prime Minister’s balancing act

Healey’s comments come after Prime Minister Andy Burnham was hesitant to throw his full support behind the plan that would ultimately increase Heathrow’s capacity.

Speaking to the BBC last month, Burnham said: “I think principally, it’s a matter for London and Londoners. I think we ought to hear the voice of people there first. It’s not right for me to just jump straight in on the back of the consultation.”

When questioned by LBC, Burnham highlighted that Heathrow expansion “could be a good idea” but posited that Manchester Airport’s available capacity be used first before considering growth at the London hub.

Former Chancellor Rachel Reeves was a keen supporter of Heathrow’s expansion, pushing for the opening of the third runway by 2035. She argued that it would “unlock further growth, boost investment, increase exports, and make the UK more open and more connected […].”

A controversial plan riddled with uncertainty

There are several actors vehemently against any such expansion, including environmental groups and key politicians.

Greenpeace UK’s Policy Director Dr. Doug Parr warns it “will certainly boost noise, air pollution and climate emissions” without providing tangible benefits to the UK economy. He highlighted that virtually none of Heathrow is owned within the United Kingdom. Indeed, French, Qatari and Saudi investors hold the majority of shares.

London Mayor Sadiq Khan is also opposed to the expansion plans. Aside from the environmental impact, he argues that it “threatens to overwhelm transport networks in the capital and beyond, creating gridlock and forcing the taxpayer to pick up a multi-billion-pound bill for the necessary public transport improvements.” Transport for London puts the price tag at roughly £9 billion.

A third runway at Heathrow has been on the table since the turn of the century, and was first officially backed under Gordon Brown’s Labour government in 2009.

Heathrow Chief Executive Thomas Woldbye said earlier this week that it “would be good to know where government is on this,” as opposing views thwart efforts to move ahead.

Long-haul flight growth has shifted elsewhere

A lack of capacity means airlines have shifted to other gateways. Heathrow’s value for airlines lies in its premium positioning, the presence of partner airlines for feeder traffic, and easy access to the city via public transport.

Gatwick Airport is emerging as a possible replacement for airlines looking to grow in London. Air Peace launched services to Heathrow, though a lack of slots meant part of its offer into London also operates at Gatwick.

Singapore Airlines is also using Gatwick as a growth platform for its flights to the capital, doubling its daily services during this year’s summer season.