Heathrow Airport Expansion Plans
Heathrow Airport will this month name Philip Jansen as its next chairman as Britain’s biggest aviation hub presses ahead with plans for a £50bn expansion. Mr Jansen, a former chief executive of BT Group and now chairman of WPP, has been in discussions with some of Heathrow’s biggest airline customers about the role in recent weeks.
Background of the New Chairman
Mr Jansen was chosen partly because of his experience running a regulated utility in the form of BT. He also ran companies such as MyTravel, once one of the UK’s largest tour operators, and payments processor Worldpay. His appointment will come at a critical time for Heathrow.
Expansion Plans
In August, the airport unveiled a revised expansion plan consisting of a £21 billion third runway, £12 billion for a new terminal and stand capacity, and £15 billion to modernize the current airport by expanding Terminal 2. The existing Terminal 3 would ultimately be closed. Heathrow handled a record 83.9 million passengers last year and believes a third runway is vital to the growth of the UK economy given the volume of exports handled through the site.
Importance of Expansion
“It has never been more important or more urgent to expand Heathrow,” the airport’s chief executive, Thomas Woldbye, said in August. “We are effectively operating at our capacity limits, to the detriment of trade and connectivity.” With the green light from Government and the right policy support, underpinned by a fit-for-purpose regulatory model, Heathrow is ready to mobilize and begin investing in its supply chain across the country this year.
Opposition to the Expansion
The expansion continues to face opposition from airlines concerned about the likely increase in fees to use the airport, as well as environmental activists. It also faces a rival bid from businessman Surinder Arora, who released more details of his construction plan for Heathrow West, which he said would cost almost a third less than Heathrow Airport Limited’s.
Alternative Plans
Mr Arora said, “This is a once-in-a-lifetime moment to finally deliver the expanded Heathrow Airport that many in the airline and airport community have been demanding.” He also mentioned that his plan can avoid disruption to the M4 and M25, which represents a further argument in favor of his plan compared to the alternative.
Government Support
Heathrow’s expansion has been backed by the government, with the Chancellor saying a third runway could "enable further growth, boost investment, increase exports and make the UK more open and connected as part of our plan for change". The new chairman will lead a board dominated by representatives of the airport’s major shareholders.
Recent Developments
The appointment of a new chairman at Heathrow comes months after the most significant changes to the ownership structure in years. A French investment group now owns 32.6% of the company following a series of transactions in the last 12 months. Saudi Arabia’s Public Investment Fund has also become an investor.
