Heathrow Airport

30 October 2025

Government Pushing for a decision

The expansion of Heathrow Airport has advanced, following the Government's initiation of a review into plans for a third runway. Transport Secretary Heidi Alexander emphasised her department’s commitment to making a decision on the airport’s expansion “within this Parliament,” with the ambition for flights to begin operating from a new runway by 2035. Alexander highlighted the importance of maintaining efficient access to Heathrow via the M4 and M25 motorways, stressing that these routes must not become “Europe’s largest car park” during the construction period.

Key Criteria for Expansion

Alexander outlined four essential tests any expansion scheme must satisfy:

  1. it must contribute to economic growth,
  2. meet air quality obligations,
  3. not breach noise restrictions
  4. align with climate change policy.

The Department for Transport will additionally seek formal advice from the Climate Change Committee on amendments to the Airports National Policy Statement (ANPS) to ensure consistency with net-zero commitments.

Policy Process and Timeline

The UK Government has restarted the policy process for Heathrow’s third runway and confirmed that a preferred development scheme will be chosen by the end of November 2025. The review of the 2018 Airports National Policy Statement (ANPS)—the planning framework for major airport expansion—has been prompted by evolving environmental and climate obligations. The Government aims to publish a revised draft ANPS for consultation by summer 2026, targeting a final planning decision before the end of the current Parliament.

Competing Proposals

Two rival proposals for the third runway are under consideration: one from Heathrow Airport Ltd. and another from the Arora Group, led by Surinder Arora. Both bidders assert that they can deliver a new runway by 2035. The Government is gathering additional information on the two schemes to aid in reaching a final decision, which will inform the remainder of the ANPS review by the end of November.

Heathrow Airport Ltd.’s Proposal

Heathrow Airport Ltd. has put forward a £49 billion scheme, which includes constructing a 3,500-metre (11,480-foot) runway west of the existing airfield. The plan would require moving and tunnelling a section of the M25 motorway beneath the new runway. The project also features a new terminal complex (T5X) and upgrades to existing terminals, potentially increasing annual flight capacity by up to 276,000 and total passenger capacity to 150 million.

Plan of London Airports Ltd Proposals below - Courtesy of London Airports Ltd

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Arora Group’s Proposal

The Arora Group’s proposal, developed in partnership with Bechtel, involves a shorter, 2,800-metre runway that avoids the M25 altogether. With a projected cost of £25 billion, the plan includes a new terminal west of Terminal 5 and aims for a phased opening starting in 2036. The Arora Group claims lower costs, reduced disruption, and faster delivery as key advantages.

Plan of Arora Proposals Below -courtesy of Arora Group

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Costs

Both schemes are estimated to cost between £25–49 billion.  How this cost can be managed without passing costs onto airlines and passengers is an issue, given that Treasury funding is not anticipated.  The Heathrow Airport Proposal is likely to be the most expensive as it involves brisging the M25 but in some respcts provides a better operational airport as a new terminal provided to the north to service the new runway.

Conditions for Approval

The updated ANPS will specify the conditions under which Heathrow’s expansion may proceed. The chosen scheme must support national economic growth, comply with air quality and noise standards, and align with the UK’s legal climate commitments, including net-zero targets. Independent advice from the Climate Change Committee will ensure alignment with the country’s decarbonisation pathway. The Government aims to publish a revised draft ANPS for consultation by summer 2026, targeting a final planning decision before the end of the current Parliament. Alexander stated that the expansion will be privately financed, with no cost to taxpayers.

Critical National Infrastructure

The Government is considering designating Heathrow as “critical national priority infrastructure.” This status would require enhanced security and resilience measures and could expedite the approvals process.

Heathrow Performing Well

The ANPS review coincides with Heathrow’s recent strong financial and operational results. The airport reported revenue of £2.7 billion for the nine months ending 30 September, a 2% increase year-on-year. Adjusted EBITDA dipped slightly to £1.53 billion, reflecting higher compliance and maintenance costs. Passenger traffic reached 63.3 million, with a record 23.4 million in the third quarter, including 8 million travellers in August alone.

 

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