{UAH} Airports Commission Backs Third London Heathrow Runway
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Airports Commission Backs Third London Heathrow Runway
Decision addresses looming capacity threat to Europe's busiest flight hub
LONDON—London Heathrow airport has won the backing of a government-appointed panel for a third runway, addressing a looming runway capacity shortage that has threatened to stifle Europe's biggest market for trans-Atlantic flights.
The landmark decision by the independent Airports Commission is a blow to rival contender Gatwick Airport which lobbied hard to be allowed to expand.
Building a new runway at Heathrow, Europe's busiest hub, would cost more than $26 billion and top $35 billion including surface access costs.
Commission chairman, Howard Davies, said, "Heathrow is best-placed to provide the type of capacity which is most urgently required: long haul destinations to new markets. It provides the greatest benefits for business passengers, freight operators and the broader economy."
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The panel was set up in November 2012 to ensure an outside group would propose a plan for addressing runway capacity shortage in the London area, after previous efforts to tackle the issue failed.
The new runway could open by 2026 if the government backs the recommendation quickly, Mr. Davies said. He warned that "we are beginning to lose ground in terms of connectivity to new markets."
Willie Walsh, Chief Executive of British Airways' parent International Consolidated Airlines Group SA, welcomed the commission's backing for an international hub in Britain, but bristled at the idea airlines may have to foot the bill for the new runway. "While we believe it would be outrageous to burden passengers with the cost of such expensive infrastructure, we will not pay for it," he said. Heathrow is the carrier's hub.
British Prime Minister David Cameron told parliament a decision on the next steps would be made by year's end. He acknowledged the need for additional airport capacity in the southeast of England, but said he would hold off on further discussion to avoid jeopardizing the pending deliberations.
Transport Secretary Patrick McLoughlin added that deciding what course to take "is not easy to resolve." Options beyond a third runway at Heathrow would be considered, he indicated.
The costs to the wider economy of doing nothing could hit £45 billion ($70 billion), the panel said. It added that the new runway would allow connections to new destinations and create 70,000 jobs by 2050.
Ticket prices would fall if Heathrow expands, as competition between carriers grows, Mr. Davies said. European budget airline easyJet PLC would open a base at Heathrow with up to 30 planes there.
'A third Heathrow runway 'will never be built.''
—Boris Johnson, London Mayor
The commission, which previously rejected a proposal by London Mayor Boris Johnson tobuild a brand-new airport, considered two rival designs for a third Heathrow runway and one for a second runway at Gatwick.
To alleviate local concerns about the hub's growth, the commission ruled out an eventual fourth runway at Heathrow, and said all night flights will be banned from 11:30 p.m. until 6 a.m., urging environmental limits on noise and pollution.
"Our new plans have been designed around the needs of local communities and will meet carbon, air quality and noise targets, and provide the greatest benefit to the U.K.'s connectivity and its long-term economic growth," Heathrow Airport Chief ExecutiveJohn Holland-Kaye said.
The panel said, "The Gatwick scheme is feasible, but the additional capacity would be more focused on short-haul intra-European routes and the economic benefits would be considerably smaller."
Stewart Wingate, chief executive of losing bidder, Gatwick Airport, signaled he would lobby the government to differ from the commission's recommendation. "It is for the commission to make a recommendation but it is of course for the government to decide. So we now enter the most important stage of the process," he said, adding that "Gatwick is still very much in the race."
Mr. Johnson said a third Heathrow runway "will never be built."
—Nicholas Winning contributed to this article.
Write to Robert Wall at robert.wall@wsj.com
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