Heathrow could use existing terminals to cut cost of expansion

Heathrow is considering expanding existing terminals instead of constructing a new building as part of measures to cut the cost of expansion by £2.5 billion.

A series of money-saving design options will be put to public consultation next month amid concerns from airlines that landing charges could be hiked to help pay for the investment.

The third runway was due to cost about £16.8 billion, but the west London hub claims it can complete the project for £14 billion without compromising on passenger experience or its commitments to local communities.

(PA Graphics)
(PA Graphics)

Options that would enable the cost reductions involve:

Installing new facilities over existing public transport infrastructure and baggage handling systems, including adding capacity to terminals five and two.

Utilising technological advancements to cut the amount of terminal space required to process passengers.

Incrementally increasing terminal capacity in blocks to match growing demand for the third runway.

Heathrow insists that landing charges - currently around £22 per passenger - will remain "close to today's levels".

Transport Secretary Chris Grayling has previously indicated that this would be a condition of giving the go-ahead to expansion.

Transport Secretary Chris Grayling
Transport Secretary Chris Grayling has said that keeping landing charges at roughly their current level would be a condition of expansion (Peter Byrne/PA)

Willie Walsh, the boss of British Airways' parent company IAG, urged the Government to make Heathrow provide a detailed breakdown of its expansion costs to ensure passengers are not ripped off.

He warned that the bill for building baggage facilities at terminal three rose from a projected £234 million to £435 million.

"It's unacceptable that a monopoly can charge these prices without having to explain why," Mr Walsh said.

"Heathrow's project costs frequently increase substantially from their original budget without any justification.

"No-one using Heathrow knows what they are paying for. How can that be right?"

A 10-week public planning consultation opens on January 17.

Heathrow's executive director of expansion Emma Gilthorpe
Heathrow's executive director of expansion Emma Gilthorpe says they will continue to work to reduce the cost of expansion (Matt Alexander/PA)

Heathrow's executive director of expansion Emma Gilthorpe said: "The Secretary of State set us the challenge to deliver an expanded airport for Britain with passenger charges staying close to current levels.

"We have now identified potential savings of £2.5 billion and are increasingly confident we can meet the affordability challenge.

"We are looking forward to presenting detailed options on how to do it in our consultation in January, and while we will continue to work to reduce the cost of expansion we will not compromise on our local commitments."

A separate Department for Transport (DfT) consultation on the draft Airports National Policy Statement, which sets out the Government's support for Heathrow, closes on Tuesday.

The DfT said it was on track to publish final proposals for expansion in the first half of next year for a vote in Parliament.

If the scheme is approved, Heathrow will submit a planning application after consulting local communities on detailed proposals.

The airport hopes to begin construction in early 2021, with the runway completed by the end of 2025.

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