Hub say R3 would be “difficult to finance”

Heathrow Hub have commented on the affordability of Heathrow Airport’s third runway plan.

Heathrow Hub say Ian Hannam, ex-global chairman of capital markets at JP Morgan, has responded to a recent statement by Willie Walsh, chief executive of IAG that the costs of Heathrow Airport’s third runway are “prohibitive” and that the Heathrow Hub extended runway independent proposal should be “put back on the table” .

Mr Hannam is a financial backer of the Heathrow Hub extended runway concept. He said: “Mr Walsh’s intervention is  significant; IAG is Heathrow’s biggest customer and would effectively pay more than half the construction costs of Heathrow expansion via increased air passenger charges.”

He also said that the overall £15.7bn cost of Heathrow’s third runway is “much larger than normal capital market activity” for Heathrow’s shareholders.

He said: “The Heathrow hub proposal is simpler, with phase 1 costing only £3.7bn. This could easily be financed in the bond or bank markets off Heathrow Airport’s current and forecast cashflows with only limited new equity”.

“I worked with Eurotunnel – a project of equivalent scale – for more than 10 years and my experience is the third runway will require Government support directly or indirectly in addition to significant increases in passenger fees which would be paid by airlines and, ultimately, consumers.”

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