Heathrow has said its controversial plan to build a third runway will be delayed by at least a year after the aviation regulator denied its request to quadruple spending before gaining planning consent.
Heathrow had asked the Civil Aviation Authority for permission to boost spending from £650m to £2.4bn despite the fact it has not yet gained permission to expand. Heathrow said the decision not to greenlight the amount it had requested would delay a third runway being completed until between “early 2028 and late 2029”.
The CAA said that while more runway capacity was needed, and that it was desirable to get a third runway built as soon as practicable, it was concerned that airport passengers could end up taking on the costs.
“Its timely delivery is required to prevent future consumers experiencing higher airfares, reduced choice and lower service quality,” said Paul Smith, the group director of consumers and markets at the CAA. “The sooner a new runway comes into operation, the sooner these benefits can be realised.
“However, we have also been clear that timeliness is not the only factor that is important to consumers. Passengers cannot be expected to bear the risk of Heathrow Airport Limited spending too much in the early phases of development, should planning permission not be granted.”
The CAA’s consultation said the “best approach in the interest of consumers” was to allow Heathrow a limited boost in spending on early construction from £650m to £1.6bn.
“The CAA’s announcement is an important milestone in expanding Heathrow and connecting all of Britain to global growth,” a spokesman for Heathrow said. “We will now review the detail to ensure it will unlock the initial £1.5bn–£2bn of private investment over the next two years at no cost to the taxpayer. Whilst this is a step forward, the CAA has delayed the project timetable by at least 12 months. We now expect to complete the third runway between early 2028 and late 2029.”
The CAA said the decision taken in its consultation was based on balancing the need for the “timely delivery” of the third runway while protecting consumer interests.
“Our consultation reflects this balance,” Smith said. “It will allow Heathrow’s operator to work towards delivering the new runway within an achievable timetable, and will reduce the risk of future airport passengers having to meet any undue financial burden if the project does not get planning approval.”