Heathrow reveals £10bn five-year plan
Image courtesy Heathrow
Heathrow is seen as the most punctual major airport in Europe this year and the best-connected airport in the world, delivering strong value for our customers and the country. The five-year plan Heathrow has unveiled is the next plank in its strategy to climb back up the international rankings and be fit for the future.
The airport's plan will designed to deliver on what its customers say matters most to them. It should enable the airport to better serve passengers, improve operational resilience and unlock growth for both airlines and UK businesses – with a boost to the UK supply chain in this Parliament. It is a 100% privately financed investment in the UK’s hub airport that will make Heathrow more sustainable and prepared for a digital future.
Heathrow says its plan can be delivered affordably with stretching efficiency savings of over £800 million and an airport charge that remains lower than it was a decade ago in real terms.
Over the past 12 months, Heathrow has been working closely with airline partners – including hosting over 120 hours of joint planning – and heard from more than two million passengers to understand what matters most, resulting in a customer-led investment plan which will span from 2027 – 2031.
This major infrastructure programme marks Heathrow’s most significant transformation in over a decade – including creating new space within existing terminals equivalent in size to 10 football pitches. From smoother journeys to new lounges, shops and restaurants, the changes should make Heathrow a more enjoyable, resilient and efficient hub for millions of passengers each year.
Aims include:
- 99% of bags travelling with passengers
- 80% of flights departing on-time
- 95% of passengers waiting less than five minutes at security
- A step-change in service with more choice for passengers requiring additional support
Heathrow hopes that this shall result in a travel experience where 95% of passengers rate their journey as 'good' or 'excellent'.
The upgrade is designed to do not only improve the airport but also to provide an boost to the UK economically. Once complete, Heathrow will be able to serve 10 million more passengers a year, a 12% increase in capacity that supports its airlines’ growth plans. Cargo handling will also get a significant lift, with plans to increase freight capacity by 20%, giving UK businesses a more efficient gateway to international markets.
Behind the scenes, Heathrow is planning the redevelopment of the Central Terminal Area and will seek planning permission to demolish the old Terminal One, extend Terminal Two and build a new southern road tunnel to improve access.
The project will be delivered by a UK-based supply chain 60% of which is based outside London and the South East, supporting skilled jobs and local businesses around the country in this Parliament.
It is funded entirely through private investment - not by the taxpayer - and is designed to be cost-effective. A £2 billion equity contribution from Heathrow shareholders will mean that the investment plan can be delivered affordably. Heathrow’s airport charge has dropped 23% over the past decade and, even with this investment, the new £33.26 charge remains below 2014 levels in real terms.
In its efforts to drive efficiency, it is stretching operating cost efficiencies of 6%, with £500 million efficiency savings on the capital spend.
To ensure the future of Heathrow is sustainable, the investment includes steps toward reducing the airport’s environmental footprint:
- Removing 3,000,000 tonnes of carbon – equivalent to 15% of 2024 footprint
- Noise insulation for 6,500 homes and 15 schools
- A sustainable and secure energy supply that maintains 100% renewable electricity
- 10% cut in waste and 20% rise in recycling
Also, Heathrow is keeping its promise to give back – aiming to reach one million people locally with programmes in skills, education and community support by 2030.
Heathrow CEO Thomas Woldbye said: “We’re making good progress on our strategy to become an extraordinary airport – having become Europe’s most punctual major airport so far this year. But our customers want us to improve our international rankings further, as do we. To compete with global hubs, we must invest.
"Our five-year plan boosts operational resilience, delivers the better service passengers expect and unlocks the growth capacity airlines want with stretching efficiency targets and a like-for-like lower airport charge than a decade ago. With Heathrow’s UK-based supply chain, this private investment will create jobs and drive national growth during this Parliament. We are ready to deliver the more efficient, sustainable Heathrow that will keep Britain connected to the world.”
The Civil Aviation Authority (CAA) will now review and evaluate Heathrow's plan.
