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Heathrow promises immediate boost from expansion, with first contracts imminent Heathrow promises immediate boost after runway go-ahead
(35 minutes later)
Heathrow has promised an immediate economic boost from the government’s go-ahead for a third runway by letting new contracts related to the £17.6bn project within a fortnight.Heathrow has promised an immediate economic boost from the government’s go-ahead for a third runway by letting new contracts related to the £17.6bn project within a fortnight.
However, airlines questioned whether the airport could be expanded without raising fares for passengers as the cost is passed on to carriers and their customers. However, airlines questioned whether the airport could be expanded without raising fares for passengers as the cost is likely to be passed on to carriers and their customers.
A parliamentary vote on the decision is still a year away, prompting the airport to seize the momentum with its contract pledge amid warnings from campaigners that the decision was only the start of a prolonged battle. The move came after the transport secretary, Chris Grayling, announced that the cabinet had endorsed Heathrow’s proposal for a third runway and new terminal, a scheme that he said would bring £61bn in economic benefits and create up to 77,000 additional local jobs. A parliamentary vote on the decision is still a year away, prompting the airport to seize the momentum with its contract pledge amid warnings from campaigners that the decision was only the start of a prolonged battle.
The move came after the transport secretary, Chris Grayling, announced that the cabinet had endorsed Heathrow’s proposal for a third runway and new terminal, a scheme that he said would bring £61bn in economic benefits and create up to 77,000 additional local jobs.
He backed the decision with three assurances: that a bigger Heathrow would be “a better neighbour”; it would bring cheaper fares; and the project would benefit the whole of the UK.He backed the decision with three assurances: that a bigger Heathrow would be “a better neighbour”; it would bring cheaper fares; and the project would benefit the whole of the UK.
Heathrow’s chief executive, John Holland-Kaye, said the first supply chain contracts for planning and design would be let imminently. Pledging that most of the contracts would go to UK companies, he said: “We’ll be spending hundreds of millions in the planning phase alone. When it gets to construction it will be billions a year. We’re really turning on the economic tap to create jobs.” Heathrow’s chief executive, John Holland-Kaye, said the first supply chain contracts for planning and design would be let imminently. Pledging that most of the contracts would go to UK companies, he said: “We’ll be spending hundreds of millions in the planning phase alone. When it gets to construction, it will be billions a year. We’re really turning on the economic tap to create jobs.”
Planning permission is not expected to be granted before 2021, with spades in the ground by 2022 at the earliest. Heathrow, whose ownership is dominated by non-UK entities including the Qatar, Singapore and China state-owned investment funds and Spanish conglomerate Ferrovial, said it would use British steel in constructing an expanded airport. That promise was repeated by Grayling, who said the government would “hold the airport to account” on making sure the new runway benefited the whole of the UK, not just the south-east. Landing slots will be ringfenced for domestic routes, he said. Planning permission is not expected to be granted before 2021, with spades in the ground by 2022 at the earliest.
Heathrow said it could still cut the costs of the scheme as airlines warned that they would not be prepared to see construction funded by a rise in the landing charges levied on carriers, with an ensuing increase in fares. Grayling said the runway “must be delivered without hitting passengers in the pocket”, a statement welcomed by British Airways, which operates around half the flights at Heathrow. Heathrow, whose ownership is dominated by non-UK entities including the Qatar, Singapore and China state-owned investment funds and Spanish conglomerate Ferrovial, said it would use British steel in constructing an expanded airport.
Willie Walsh, the chief executive of BA’s owning group IAG, said: “The cost of this project will make or break it. Heathrow want it, argued for it and now must ensure it’s the UK and the travelling public who get the benefits from the runway not the airport’s owners.” That promise was repeated by Grayling, who said the government would “hold the airport to account” on making sure the new runway benefited the whole of the UK, not just the south-east. Landing slots will be ringfenced for domestic routes, he said.
Heathrow said it could still cut the costs of the scheme as airlines warned that they would not be prepared to see construction funded by a rise in the landing charges levied on carriers, with an ensuing increase in fares.
Grayling said the runway “must be delivered without hitting passengers in the pocket”, a statement welcomed by British Airways, which operates about half the flights at Heathrow.
Willie Walsh, the chief executive of IAG, which owns BA, said: “The cost of this project will make or break it. Heathrow wants it, argued for it and now must ensure it’s the UK and the travelling public who get the benefits from the runway not the airport’s owners.”
He added: “We will be vigilant in ensuring that Heathrow does not raise charges to benefit its shareholders to the detriment of the travelling public.”He added: “We will be vigilant in ensuring that Heathrow does not raise charges to benefit its shareholders to the detriment of the travelling public.”
However, John Holland-Kaye, Heathrow’s chief executive, said it would not need to substantially increase charges and fares could fall: “On average, we can deliver this for the same charges as today. That’s important for the economic point of view - but from the passenger point of view, capacity to get airlines like Flybe and EasyJet in will help competition.” However, Holland-Kaye said it would not need to substantially increase charges and fares could fall. “On average, we can deliver this for the same charges as today,” he said. “That’s important for the economic point of view – but from the passenger point of view, capacity to get airlines like Flybe and easyJet in will help competition.”
Paul Drechsler, president of the Confederation of British Industry (CBI), said the decision to expand was “an enormous relief to firms in every corner of the country”.
Paul Drechsler, president of business lobbying group the CBI, said the decision to expand was “an enormous relief to firms in every corner of the country”. He added: “It will create the air links that will do so much to drive jobs and unlock growth across the UK. With contracts to tender for, apprentices to recruit and supply chains to build. This decision must be taken forward swiftly, giving businesses the confidence to invest.” He added: “It will create the air links that will do so much to drive jobs and unlock growth across the UK. With contracts to tender for, apprentices to recruit and supply chains to build. This decision must be taken forward swiftly, giving businesses the confidence to invest.”
But while business welcomed the decision, widespread protests and legal challenges are expected to follow Tuesday’s decision, with campaigners arguing that a runway would further worsen air quality, increase noise and jeopardise Britain’s climate change commitments. Locally, expansion will mean the demolition of the nearby village of Harmondsworth, with the loss of nearly 800 homes. But while business welcomed Tuesday’s decision, widespread protests and legal challenges are expected, with campaigners arguing that a runway would further worsen air quality, increase noise and jeopardise Britain’s climate change commitments.
Greenpeace and four local councils have set aside funds for legal action, while environmental law firm Client Earth said a third runway is illegal given commitments on air pollution. That coalition of opposition will be joined by the mayor of London, Sadiq Khan, who accused the government of “running roughshod over Londoners’ views”. He said he had been elected on a clear platform of opposing a new runway at Heathrow, which would be “devastating for air quality across London.” Locally, expansion will mean the demolition of the nearby village of Harmondsworth, with the loss of nearly 800 homes.
Questions also remain over the amount of public funding that will be required to build new road and rail links to a third runway. According to a statement of principles signed between the government and the airport, Heathrow has only committed to pay for the M25 tunnelling and local road diversions, although the Airports Commission estimated surface access improvements costing £5bn would be needed. Greenpeace and four local councils have set aside funds for legal action, while environmental law firm Client Earth said a third runway is illegal given commitments on air pollution.
The runway is dependent on a package of conditions, including enhanced compensation for residents, and legally binding noise targets, including a six-and-a-half-hour ban on scheduled night flights. The third runway is expected to bring almost 50% more planes over London and the south-east. Grayling told the Commons that “even with Heathrow expansion, fewer people will be affected by aircraft noise than today”. According to critics of the project, that is a promise that relies on technical definitions of disturbance, but may prove little consolation to neighbourhoods brought under new flight paths. That coalition of opposition will be joined by the mayor of London, Sadiq Khan, who accused the government of “running roughshod over Londoners’ views”. He said he had been elected on a clear platform of opposing a new runway at Heathrow, which would be “devastating for air quality across London”.
John Stewart, chair of the anti-expansion campaign group Hacan, said: “Heathrow will be rejoicing and seeing it as the end of the battle. For many people, including the big green organisations, it is day one. The next stage will be critical. Real doubts must remain whether this new runway will ever see the light of day.” Questions also remain over the amount of public funding that will be required to build new road and rail links to a third runway. According to a statement of principles signed by the government and the airport, Heathrow has only committed to pay for the M25 tunnelling and local road diversions, although the Airports Commission estimated surface access improvements costing £5bn would be needed.
The runway is dependent on a package of conditions, including enhanced compensation for residents, and legally binding noise targets, including a six-and-a-half-hour ban on scheduled night flights.
The third runway is expected to bring almost 50% more planes over London and the south-east.
Grayling told the Commons that “even with Heathrow expansion, fewer people will be affected by aircraft noise than today”. According to critics of the project, that is a promise that relies on technical definitions of disturbance, but may prove little consolation to neighbourhoods brought under new flight paths.
Criticism was voiced by John Stewart, chair of the anti-expansion campaign group Hacan (the Heathrow Association for the Control of Aircraft Noise).
He said: “Heathrow will be rejoicing and seeing it as the end of the battle. For many people, including the big green organisations, it is day one.
“The next stage will be critical. Real doubts must remain whether this new runway will ever see the light of day.”