Newcastle Football Club, Independent newspaper, Rocco Forte Hotels, Selfridges, Aston Martin cars and now Heathrow Airport. Saudi Arabia is investing tens of billions of pounds in the UK and plans to invest tens of billions more. A consortium backed by Riyadh’s sovereign wealth fund, the Public Investment Fund (PIF), has agreed to buy a 25 per cent stake in Europe’s busiest hub airport, currently held by Spanish infrastructure giant Ferrovial, with private investment firm Ardian for £2.4bn. is buying.
It can further increase its share by giving majority control to the consortium. The deal is expected to be completed before the summer. PIF says it aims to be a “long-term partner” for the airport.
How will new money and new Gulf thinking transform Heathrow?
The biggest question for passengers, airlines and people living in west London is the third runway. Many airlines and politicians are pushing for £14 billion worth of development to increase passenger capacity to 142 million a year; This figure is almost double the record of 81 million achieved in 2019. The project was approved in 2003, but the coalition government led by David Cameron withdrew its support in 2019. After a backlash from green campaigners in 2015. Theresa May’s government reversed this decision in 2018.
Two years later the Court of Appeal ruled that a third runway would be incompatible with the UK’s climate commitments. This decision was later overturned by the Supreme Court the same year. Before leaving his post as Heathrow’s chief executive last year, John Holland-Kaye said he was examining “what it would take to restart the planning process”.
“The airport deserves a third runway,” says aviation analyst Henry Harteveldt of Atmospheric Research. “Once the legal situation is resolved, I believe this will finally move forward.”
But it looks like the new Saudi billions won’t be poured into new asphalt. Sunday Times recently reported that the third runway has been shelved. Heathrow managers are understood to think that not only would environmental opposition make it difficult to obtain planning permission, but disruption to road traffic during the construction process, particularly on the M25, would be politically unacceptable.
Heathrow’s new chief executive, Thomas Woldbye, has publicly denied that the third runway project is off the table, but is said to be looking at new ways to squeeze up to 20 million more passengers into the airport each year by 2036 without new tarmac. Heathrow desperately needs more flights and more passengers. It offers direct connections to just 214 destinations, compared to 330 for Frankfurt, 328 for Paris Charles de Gaulle and 272 for Amsterdam Schiphol, losing the crown as the world’s busiest international hub to Dubai.
But how can it attract more? New, better-located terminals and gates will help handle more aircraft and more passengers faster. There is no terminal 1; It closed ten years ago. It could be rebuilt to create space for T2, Heathrow’s oldest terminal, to be demolished and rebuilt as a new home worthy of its major carriers Virgin Atlantic, Emirates and Qantas. Terminals 1, 2 and 3 could form a central hub to serve all airlines except BA, which would remain at terminal 5.
Terminal 4 can be closed, which will increase efficiency. T4 is in the wrong place; not between the runways as in all other terminals, but on the far side of one of the runways; This means jets departing and arriving often have to pass through a “live” runway, causing delays.
Surinder Arora, founder and chairman of Arora Group, one of the UK’s largest private hotel owner-operators, plans to create terminal competition at Heathrow by building a new terminal on land between the T5 and M25 motorway. It could be a new T4.
Some analysts say Heathrow should adopt “mixed mode”, using the same strip of tarmac for takeoff and landing at the same time, as at single-runway airports such as Gatwick. To minimize noise pollution for local residents, Heathrow switches between runways, using one of the runways for takeoff for a few hours, then landing and vice versa. Analysts say using mixed mode can increase the number of takeoffs and landings by about 30 percent. New air traffic control systems that reduce the time intervals between takeoff and landing will further increase the number of flights.
It seems unlikely that such changes will be made anytime soon. Reforms to airport use may require acts of Parliament and financial analysts say rising costs mean there is little appetite for new construction work. A new T1 and a new T3 would cost around £10bn. This leaves technology as the main means of improving efficiency. New investors from the Gulf have an advantage here.
Since all the new airports in the Gulf are very new, they have pioneered cutting-edge technology. I was among the first passengers to fly in and out of the new Abu Dhabi Airport after it opened last year, and it holds hints of what Heathrow could look like.
There are only “public use” check-in machines and desks. Departing passengers can use any of the hundreds of automated machines and baggage drop terminals for all 29 airlines served. Old-fashioned paper luggage tags are being replaced with computer chips or QR codes linked to passenger reservation information. All of this makes it much faster to check in and get to passport control, which is the fastest in the world because it uses facial recognition. You don’t need to show your passport. Since facial recognition is also used at the gates, boarding the plane is also faster.
These innovations are being incorporated into new terminals to be built at Riyadh’s King Khalid airport as the kingdom’s de facto ruler Mohammed bin Salman transforms it into a five-runway hub that will house flag carrier Saudi Arabia and a new beginning. the upstream carrier is Riyadh Air. Saudi airport operators are also experimenting with X-ray security belts that passengers can easily pass through with their luggage, without having to put the bags on the conveyor belt and through the scanner.
One of the changes at Heathrow is likely to be low-tech. The airport may only have two runways, but it’s a very large area; five square miles. There’s plenty of space to park jets on remote stands and park bus passengers on the steps. Passengers will hate it, but they may accept it if it means more flights and fewer delays. Especially if they have to go to Saudi Arabia. Saudi investment is likely to make it easier for the new Riyadh Air to win coveted slots.