UK government opts for new Heathrow runway

UK Prime Minister Theresa May's government, faced with an increasing need to boost aviation capacity in the country's southeast, announced today it backing a new third runway at London's Heathrow Airport, in which China Investment Corp. has a 10 percent stake.

In what it described as a major boost for the UK economy, a government statement said the plan would create the first full length runway in the south-east region since World War II.

"Today's decision is a central part of the government's plan to build a global Britain and an economy that works for everyone," the announcement said.

The project for extra runway capacity has become a political hot potato, with aviation experts over the years telling the government an extra runway is needed at either Gatwick, to the south of the capital, or Heathrow, the main airport 16 miles to the west of the capital.

The government confirmed there would be public consultation on its preferred option in the new year. That is expected to end with a parliamentary debate scheduled by the beginning of 2018.

The two main UK carriers, British Airways and Virgin Atlantic, warned that the cost of the extra runway at Heathrow should not involve any extra landing charges.

"We support Heathrow but not at any costs. The final scheme must be affordable and cost efficient. Heathrow passenger charges are already the highest in the world," said Craig Kreeger, Virgin's chief executive.

IAG, the holding company which includes British Airways, Ireland's Aer Lingus and Spain's Iberia, also warned against increasing charges. The group warned it would consider expanding operations in Dublin and Madrid if Heathrow becomes too expensive.

Heathrow is owned by FGP Topco Ltd., with Ferrovia wealth fund the biggest shareholder with 25 percent, and China Investment Corp. holding 10 percent. Existing shareholders will not be asked to fund the extra runway, which will be paid for by passenger taxes and UK government funds.

Unusually May has given ministers opposed to the Heathrow plan, including Education Secretary Justine Greening and Foreign Secretary Boris Johnson, permission to air their views on the proposal for a specified period.

Earlier this month China and the UK agreed to increase the number of flights between the two countries to 200 a week, with two Chinese carriers – Hainan Airlines and Tianjing Airlines – saying they would look at the possibility of increasing flights.

In May this year, the last month for which data is available, passenger traffic to and from China via Heathrow rose 7 percent, Heathrow's website reported.

To contact the reporter: chris@mail.chinadailyuk.com