Heathrow's Third Runway Costs Could Reach £13bn
Airport International has learnt that the costs associated with the third runway being planned for London Heathrow Airport are up to £13 billion - exceeding the anticipated costs of the 2012 London Olympic Games. Such expense would elevate Runway Three to a position as the largest individual investment by the private sector in the UK. The £13 billion quoted is also considerably higher than airport group BAA's initial forecasts, which the company recently placed within "single figure billions."
£650m Funding Target 5% of Runway's Cost, Say Airlines
According to analysts at British Airways, as well as other airlines, the £650 million in funding which, it is hoped, will be achieved over the coming five years, symbolises a mere five per cent of the runway's total cost. The ramification for passengers during this period, according to the CAA, is expected to be additional charges of up to 40 pence on landing fees - a significant increase over the £10 (approximately) charged at the moment.
The Chief Executive of British Airways, Willie Walsh, stated: "It is probably too early to say what exactly the extra cost will mean to passengers. However for the airlines it is important to say that we will want to make sure that we get value for money."
The issue of the cost of Heathrow Airport's third runway will likely be placed on the backburner until full authorisation for its construction is granted. However, the potential is there for it to be a source of confrontation between airport operating group BAA - which owns London Heathrow - and the airline industry - the two of which already have a fragile relationship.
New Runway Will Open Up Arrival/ Departure Slots Debate
The new runway will also fuel an inter-airline debate regarding the additional arrival and departure slots it will open up. It is anticipated that around half of these slots will be given to newly-established carriers, meaning a lesser share for Heathrow's largest airline users - including bmi and British Airways.
BA's Walsh said, in this regard: "The value of slots at the moment is driven by scarcity and therefore I would expect the prices that are being paid to reduce over time, it is simply supply and demand."
The division of slots at Heathrow may become further entangled should the government implement a system based on environmental credentials.
Quizzed over the issue of the new runway's cost, a spokesperson from BAA recently commented: "We sign up to the figure of £7bn to £8bn released in the Government consultation paper, but the reality is there is still a lot of work to be done."
Source - Airport International's London Reporter
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Further Resources:
BAA Heathrow Company Information
