Heathrow announces new investment

Heathrow has announced £3bn further investment in Heathrow Airport to improve passenger handling and to accomodate new designs of aircraft.

The further investment is to be focussed on better customer service, increased airport resilience and reliability, and improved environmental performance.

These new funds are in addition to the £11bn that has been invested since 2003 and form part of the airport’s business plan for ‘Q6’ – the regulatory period which covers 2014-2019. It is one of the largest private-sector investments in UK infrastructure.

The plans include the completion of Terminal 2 and the early works on extending the building; the development of a new integrated baggage system; and the construction of new taxiways and stands which will allow Heathrow to accommodate more of the most modern aircraft.

The Q6 plans include completing the new Terminal 2 and opening it in 2014, which will allow the closure of Terminal 1 in 2016. The end of Q6 will see the start of work on extending Terminal 2. The £3bn also includes a contribution to the cost of the Crossrail spur.

There will be more self-service check-in kiosks and introduce new self-service bag drops, better real time information and free wi-fi – which will be welcomed by business travellers. Most UK airports charge for wi-fi access, to the annoyance of many.

The rapid transit pod system will be extended to link Terminals 2 & 3 with their business car parks, and more retail space will be created. and additional lounges, all of which contribute to significantly offsetting airport charges.

Upgraded stands and taxiways are designed to make Heathrow the busiest hub in Europe for A380s. These are quieter and more fuel-efficient than the aircraft they are replacing. This combined with an extension of the trial of operational procedures – including incentives and penalties to encourage airlines to operate the quietest aircraft – will help reduce the noise and poluution impact of the airport. , we will continue to trial new operational procedures that can reduce noise for local communities and roll out improved noise insulation schemes for local properties.

Heathrow say the new facilities, and the retiring of old facilities such as Terminal 1 will deliver £248m of efficiency savings, and lead to greater punctuality – with a target of 90% on-time – and quicker transfers with less queuing.

Heathrow is the UK’s only hub airport, accounting for 78% of all long-haul flights from the UK. Every five years the Civil Aviation Authority (CAA) scrutinises the airport’s capital expenditure plans, operating costs and commercial revenues to set the maximum amount the airport is permitted to charge airlines over the coming period. The publication of the airport’s business plan for 2014-2019 serves as an input to the CAA’s decision.

Like much UK infrastructure Heathrow historically suffered from out-dated facilities and decades of under-investment. Since 2003, Heathrow (formerly BAA) has put £11bn into the airport, including the construction of Terminal 5, a new Terminal 2 due to open in 2014, new baggage tunnels, and the refurbishment of Terminals 3 & 4.

Operational performance has improved, with the proportion of passengers rating their journey as ‘very good’ or better increasing from 48% in 2007 to 72% today. The airport has moved from the bottom to the top quartile of EU airports for passenger satisfaction. In 2012 Terminal 5 was voted the world’s best airport terminal.

Colin Matthews, Chief Executive of Heathrow said: “Heathrow is a strategically important national infrastructure asset. It faces stiff competition from other European hubs and we must continue to improve the service we offers passengers and airlines.

“Our plan for a further £3 billion of private-sector investment will further improve the airport for passengers. The plan represents good value for money for airlines and passengers and comes at no cost to taxpayers.”

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