Heathrow's newly appointed chair, Philip Jansen, has apparently decided that the best way to handle a multi-billion-pound airport expansion dispute is to sit everyone down and have a chat. The former BT boss is now trying to broker peace between airlines, a billionaire hotelier, and basically anyone with an opinion on the £49bn third runway plan that has been kicking around for decades.
Jansen, who took over the gig at the start of the year, has been holding meetings with the airport's carriers and Surinder Arora, the local landowner pushing his own £25bn expansion scheme. The goal? Find some middle ground in a row that's mostly about cost and service issues, because nothing says "aviation progress" like a good old-fashioned staring contest between stakeholders.
Last week, Jansen and Heathrow CEO Thomas Woldbye met with International Airlines Group, the parent company of British Airways. BA, which controls more than 50% of slots at the airport, has made it clear that the cost of the third runway needs to be capped at a mere £30bn - roughly £19bn less than Heathrow's current estimate. Luis Gallego, IAG's chief executive, seems to think that's a reasonable ask.
Jansen has also chatted with Virgin Atlantic and Arora, the multibillionaire hotelier who has spent years accusing Heathrow of "ripping off" passengers, airlines, and retailers with high charges. BA, Virgin, and Arora are all part of the campaign group Heathrow Reimagined, which wants to drastically reduce operating costs at the airport. Apparently, the airlines have refused to back the expansion plan "at any cost," which is the polite way of saying they're not writing a blank cheque.
Heathrow, conveniently considered Europe's most expensive airport, had its plans to raise landing fees rejected by the UK aviation regulator in March. Because nothing says "let's build a third runway" like being told you can't charge more for the first two.
"All airlines and their stakeholders agree over the necessity and long-term economic value of a third runway," a source familiar with the talks said, in that hopeful tone people use when they really want everyone to get along. "There are just differing points of view. Airlines want the lowest possible cost, other people want to get involved and think it can be done cheaper."
The source added: "Whatever happens, we are all going to have to work together. There needs to be good relations if we want to re-engineer a way forward." So basically, the plan is to hold hands and sing Kumbaya until someone figures out the math.
Chancellor Rachel Reeves has thrown the government's weight behind the expansion, pledging work will begin before the next election. This is despite decades of controversy and opposition over costs, local impact, and the small matter of the environment. In November, ministers backed a plan for the runway to be operational by 2035, over Arora Group's rival proposal. But Heathrow still needs formal planning approval to start construction by 2029, which is basically a decade away in government time.
Heathrow is owned by a consortium led by the French company Ardian, with sovereign wealth funds from Qatar, Singapore, and Saudi Arabia also in the mix. China Investment Corporation, which owns 10% of Heathrow, is reportedly considering selling its stake over concerns about rising costs, according to the Financial Times. Because nothing says "confident investment" like bailing before the heavy lifting starts.
A Heathrow spokesperson said: "As newly appointed Heathrow chairman, Philip Jansen is spending time meeting with the airport's key stakeholders. Building constructive relationships with them and especially our airline and commercial partners is essential to deliver our shared goals of excellent customer experience and fulfil our vision of being an extraordinary airport, fit for the future." Translation: We're having meetings.
Jansen has a reputation for bringing opposing parties together. At BT, he helped secure £15bn for full fibre broadband rollout after decades of wrangling, promising to "build like fury" and address the UK's status as a global internet laggard. He also joined beleaguered WPP as chair last year, which promptly led to the removal of CEO Mark Read. So his track record is either peacemaker or executioner, depending on the day.
Separately, Aviation Services UK, representing ground-handling companies like Menzies, Swissport, and Dnata, has written to aviation minister Keir Mather warning that the sector may need a Covid furlough-style scheme if fuel shortages cause widespread flight cancellations this summer. The ground-handling sector, which employs about 30,000 people managing baggage and check-in, gets paid based on planes actually flying. The issue of cutting and rehiring staff - who require lengthy security vetting - became apparent during the pandemic, when shortages caused chaos as airports tried to recover. Because apparently, we've learned nothing.