Airport warning over ‘full’ Heathrow as transfer traffic takes off on Iran war
London’s main gateway to the world and the UK’s busiest airport issued a forthright warning over its capacity on Wednesday, as war in the Middle East meant demand for flight transfers took off.
“Heathrow is full”, said its chief financial officer, Sally Ding.
She spoke out alongside the release of first-quarter numbers which revealed 18.9m passengers travelled through it in the first quarter. That is a 3.7% rise year-on-year.
Closures of airspace due to the war in Iran meant a rise in transfer passengers. The trend is set to continue as the geopolitical certainty lingers, affecting one of the UK airport’s main international rivals for global connections, Dubai.
Heathrow’s trading update said it had “temporarily absorbed demand from elsewhere”. It also said “passenger numbers for the rest of the year are likely to be impacted whilst there is significant uncertainty in the Middle East”.
Revenue in the first quarter rose 2.3 per cent to £844m.
But as the home-spun saga over planning approval for a third runway drags on, Ding said Heathrow operating capacity meant “fewer choices and higher fares for passengers and missed opportunities for the UK economy”.
In an appeal for full backing for development plans at the 80-year-old West-London hub, she added: “Expansion is about delivering more routes, more competition and ultimately better outcomes for the people and businesses who rely on us.”
The Financial Times reported on Wednesday that Chinese Investment Corporation, the country’s sovereign wealth fund, was considering sellings its 10 per cent stake in Heathrow over concern at the spiralling cost of expansion. CIC has been a major investor in the airport since 2012.
Heathrow’s expansion plans
Heathrow’s £50bn bid to boost capacity has been caught in political controversy for years.
Its plans for a new, 3.5-kilometre runway will boost passenger capacity to 150m a year from 84m. With it, the airport could handle 756,000 flights a year, up from 480,000 at present.
“Our plan is privately financed, rigorously assessed and focused on value. With the right regulatory framework and government policy in place, we are ready to invest, grow and keep the UK connected to the world,” Heathrow said on Wednesday.
The scheme involves altering part of the M25, London’s orbital motorway which runs near Heathrow, by moving it into a tunnel.
For the first time in the Heathrow’s history, the government looked at a rival expansion plan from another company.
The cheaper bid – priced at £25bn, and tabled by the Arora Group, which operates hotels and is active in property asset management as well as construction – would have steered clear of the M25.
It was rejected last autumn by Transport Secretary Heidi Alexander.
She picked Heathrow’s plan, but it has been held up further by a government decision to review its over-arching strategy in its Airports National Policy Statement, now expected this summer.
Environmental groups and local residents oppose any expansion of Heathrow. London Mayor Sadiq Khan has spoken out against plans, due to air pollution, noise and climate impact.
Business has long been calling for expansion, which is widely seen across corporate Britain as essential for national economic growth.
Heathrow said on Wednesday: “Progress now depends on upcoming regulatory decisions from the Civil Aviation Authority and the government’s draft Airports National Policy Statement in July, which are critical to maintaining investor confidence and keeping plans on track for planning permission by 2029, with the most imminent milestone being the CAA consulting on its short list of regulatory models for expansion in coming weeks”.