Room for both Heathrow and Gatwick to expand, says airport boss

The boss of Heathrow has said there is room for both of London’s biggest airports to expand significantly if the government can guarantee steps to a third runway, with ministers expected to approve Gatwick’s second runway this week.

Thomas Woldbye said Heathrow would be seeking government commitments on the airport’s funding model and changes to airspace before construction of a new runway could start.

Heathrow reported rising annual profits and record passenger numbers on Wednesday and Woldbye said the figures underscored why the airport was a “gateway to growth”.

The company’s pre-tax profits rose 31% to £917m while the number of passengers it served last year rose 6% to a new annual high of 83.9 million.

It plans to pay a £250m dividend to shareholders this year, its first payout since February 2020, on the eve of the pandemic.

The airport has set a target of 100 million passengers a year, hoping to reach it through work to reorganise its terminals and airfields. A third runway – which could be open as early as 2035, Woldbye said – could take it to 140 million.

Government policy had been guided by the recommendation to limit UK airport expansion, pitting Heathrow against Gatwick, but the latest CCC report, published on Wednesday, dropped the proscription.

The transport secretary, Heidi Alexander, appears likely to approve a development consent order for a second runway at Gatwick with a decision officially due on Thursday. She told an aviation industry dinner on Tuesday night: “I am not some sort of flight-shaming ecowarrior. I love flying. I always have.”

Woldbye said that Heathrow’s runway plans should not be affected: “There’s always quite a bit of uncertainty in a project like [the third runway] and determining demand.

“Gatwick is a different proposition. It’s not a hub airport. We carry a lot of trade, super-important for the country, and are largely based on long-haul carriers, the opposite of Gatwick. So I think there is space for both of us, and this will create competition to the benefit of the passengers.”

Heathrow’s third runway plans, to be submitted in the summer, would be unchanged from its last proposed scheme in location and physical design, Woldbye said.

However, the crux of the submission, “a 360 [degree] view of the proposal” would be focused on “how can we deliver not just the physical part, but also the planning commissions, the slot structure, distribution structure, the regulations, airspace, mobilisation”.

Despite the clear political backing signalled in the chancellor, Rachel Reeves’s, pro-growth speech last month, Woldbye said legislation or action would be needed to progress. He said: “Neither we, nor the airlines, would be happy with just a speech, we need to have something in writing.”

He said the company needed the government to “commit to some of these parts in order for us to proceed. We need, for example, to make sure that airspace modernisation is in place, because otherwise we’ll be building a piece of tarmac with no exits, and that doesn’t really work for anyone”.

In December, the private equity firm Ardian became Heathrow’s largest shareholder, with a 23% holding, partnering Saudi Arabia’s Public Investment Fund, which now owns 15%.

Woldbye said: “Our shareholders, our board is backing the third runway, but [only] given the conditions that we will put in our proposal. This is enormous investment, and it’ll carry quite large risks no matter what we get in place. But we need assurances on some of these critical points, because otherwise we don’t know what we are moving into.”

Woldbye would not put a figure on the cost, which has been estimated at more than £20bn.

He claimed sustainable aviation fuels and advances in engineering would decrease emissions, despite UK aviation emissions having continued to rise to 75% above 1990 levels, according to the CCC. “From the day you open the runway, of course you will see an immediate increase. I still think that the emission per passenger will be down at that point,” he said. “Our gaze is firmly on delivering the third runway.”