What the FT? Heathrow runway wins government backing

The FT has reported that Heathrow has secured Government backing for a third runway. Charlotte Croney of Herbert Smith Freehills explains the story…

Heathrow, aeroplane, runway

What’s the background?

Airport expansion has been seen as vital to keeping the UK connected to the rest of the world. It enables the UK to realise the economic benefits from foreign trading partners (for example the UK recently agreed to double its number of flights to China) and provides passengers with a greater choice of destinations. However, Heathrow has been operating close to its maximum capacity for a long time and other UK airports in the South East are projected to reach maximum capacity by 2040.

WTFT
Read the original FT article at the bottom of the page

Agreeing an expansion is urgent as projects of this scale take years to design (including obtaining any necessary consents), build, and become operational. For the UK’s airports to maintain a competitive position in the market, an expansion must be operational long before other airports reach maximum capacity.

There have been various plans to expand airport capacity in the South East since the 1960’s. Previous attempts to expand Heathrow have met fierce opposition from parties such as councils and local residents that will be affected by the development and the associated air and noise pollution. Therefore, to try and pre-empt future concerns, Chris Grayling (the UK’s transport minister) has suggested setting up an independent noise regulator to try and control noise levels from the airport. He has also suggested that even taking into account the expansion, levels of airport noise will be lower than at present due to newer quieter aircraft.

Is the expansion definitely going ahead?

While the Government has decided to expand Heathrow, this issue is far from over. The Government’s measures may not be sufficient however to deter local residents and other affected groups (such as west London boroughs and local councils) from launching judicial review proceedings.

For example, parties may claim judicial review on the grounds that increased road traffic generated by an expanded Heathrow will impact levels of air pollution in the area. Chris Grayling has released a statement that Heathrow’s third runway will only be given planning consent if the current air quality standards are not breached.

However, barely two weeks after the expansion announcement, the High Court declared the Government’s current plans to improve air pollution illegal. At this stage, Heathrow has no certainty as to the levels of air pollution permissible in its area once the new runway is opened.

The effect of a successful judicial review claim could result in the Government having to make the decision of which airport to expand again. This would not necessarily prevent the Government from choosing Heathrow again over its competitors, but they would need to demonstrate that the process by which they had arrived at the decision to expand Heathrow was lawful and all relevant factors were considered.

Who will pay for Heathrow’s expansion?

The Government has stated that the private sector will meet the cost of completing the expansion instead of the taxpayer. The expansion will also provide new jobs and significant economic benefits. Although concerns have been raised that the expansion’s projected price might increase the cost to the public of flying from the airport. However, the Airports Commission and the Civil Aviation Authority have suggested it is possible to expand Heathrow without passengers being financially affected and Chris Grayling has commented that “it must be delivered without hitting passengers in the pocket”.

What will happen next?

The Government’s decision to expansion must pass a parliamentary vote next year, in addition to any legal challenges.

Heathrow secures government backing for third runway

By Henry Mance and Robert Wright

Theresa May’s government has backed a third runway at Heathrow, kick-starting a process to expand airport capacity in south-east England that has been blocked by delays and indecision for more than a decade.

Chris Grayling, the UK’s transport minister, announced the move on Tuesday, calling it a “truly momentous” step that would “boost our connections with the rest of the world”.

Heathrow saw off competition from Gatwick and a rival Heathrow Hub proposal, both of which were deemed viable but inferior by Sir Howard Davies’ Airports Commission. It now faces a parliamentary vote next year, a planning inquiry and a likely judicial review before it is able to build the runway, which it says will be operational by early 2026.

Heathrow welcomed the government’s decision, saying its plan was the only option to connect all of the UK to global growth.

Capacity has become an urgent issue for business because Heathrow has long operated at full capacity and the Airports Commission, which reported last year, projected all the south-east’s airports would be full by 2040.

Delays in addressing the problem have become emblematic of Britain’s infrastructure failings. Previous attempts to expand Heathrow, which is in a far more built-up area than most hub airports, have become entangled in a thicket of legal, planning, political and logistical issues. The third runway was endorsed by a 2003 white paper by the Labour government and, at that time, was expected to be built by 2020.

Announcing the decision to the Commons, Mr Grayling, sought to reassure the scheme’s many critics.

“I know that some members of this house have strong convictions on this issue,” he said. “Everyone in this house will understand the significance of this announcement.”

Critics argue that the third runway, one of Britain’s biggest-ever construction projects with an estimated cost of £16.5bn, will be financially unviable – and the resulting flights will inflict intolerable noise on hundreds of thousands of west London residents. Mrs May, whose constituency is also affected, had opposed a third runway as recently as 2009 because of noise concerns.

Supporters say Heathrow is best placed to offer the long-haul flights that will connect the UK to its growing trading partners in Asia and elsewhere. Heathrow accounts for about 70 per cent of the UK’s scheduled long-haul flights, compared with Gatwick’s 11 per cent.

The decision is all but certain to be subject to judicial review by a group of four west London boroughs and by Windsor and Maidenhead council, to the airport’s west.

Ravi Govindia, leader of Wandsworth council, one of those preparing to fight the decision, said the fight over the runway was far from over. “It is wrong on every level, legally undeliverable and will end in failure after years of wasted of effort,” he said.

Mr Grayling sought to head off such challenges by offering reassurance about both the financial and environmental cost of Heathrow expansion. He said new, quieter aircraft meant residents of the Heathrow area would suffer less airport noise after expansion than at present. He also pledged to consider setting up an independent airport noise regulator, as recommended by the Airports Commission.

The government would not give Heathrow planning consent unless it was convinced expansion could be achieved without breaching current air quality standards, Mr Grayling said.

Stewart Wingate, Gatwick’s chief executive, said the airport was “disappointed” and reiterated his doubts about the Heathrow plan’s viability.

“The challenges facing Heathrow have not changed,” Mr Wingate said. “Our message today is that Gatwick stands ready to proceed when the time comes.”

Mr Grayling also gave a nod to the concerns over cost of International Airlines Group, the parent of British Airways, which has said passengers might not be able to afford to use the expanded airport at the projected price. “It must be delivered without hitting passengers in the pocket,” Mr Grayling said. “The Airports Commission was clear that this was achievable, as are the Civil Aviation Authority.”

IAG, Heathrow’s biggest customer, welcomed the assurance. Willie Walsh, IAG’s chief executive, said the cost of the project would “make or break it”, adding: “The government’s directive to cap customer charges at today’s level is fundamental.”

The parliamentary vote is set to take place in about a year, once the government has drawn up its National Policy Statement on aviation. Several key Conservative opponents of the plan may vote against it, although the measure is expected to pass comfortably with support from the Scottish National party and most Labour MPs.

Original article published on FT.com. Reproduced with permission.