Heathrow's third runway plans face major financial hurdles

IAG's CEO warns the costly third runway may not serve its intended purpose.

Heathrow's third runway faces high costs and serious concerns

Luis Gallego, CEO of International Airlines Group, has sounded the alarm over the proposed third runway at London Heathrow. He claims that the project's hefty estimated cost of nearly $28 billion could lead to increased charges for airlines and passengers, making the runway potentially unsustainable. Current projections indicate that the cost per passenger could rise significantly, doubling from around $33 as regulated by the UK's Civil Aviation Authority. This has led to concerns about whether the new runway could end up being "empty." Even as Heathrow pushes for the development, with plans finalized recently, it faces political and environmental opposition as well as criticism over its rising fees. City officials, including London Mayor Sadiq Khan, cite air pollution and noise as major issues, while some airline leaders express anxiety over the increased operational costs that would affect fares.

The debate surrounding Heathrow's third runway underscores broader tensions in the aviation industry. High construction expenses could limit access for both airlines and passengers, potentially undermining the airport's goal of accommodating rising demand. While Heathrow anticipates operational capacity of up to 150 million passengers annually, the risk of empty flights highlights the discrepancy between ambitious infrastructure plans and the financial realities that airlines face. As opposition builds, the government must consider both environmental impacts and economic viability as they navigate this complex issue.

Highlights

The future of Heathrow's expansion hangs on balancing economic and environmental concerns.