Heathrow’s £49 Billion Expansion Plan Gets Government Green Light

Britain has officially backed Heathrow Airport’s £49 billion ($64 billion) expansion and upgrade plan, selecting it as the preferred option for delivering a long-awaited third runway. The government confirmed the decision on Tuesday, choosing Heathrow’s proposal over a cheaper rival bid from the Arora Group.

The move follows UK Finance Minister Rachel Reeves’ January commitment to build a third runway as part of a strategy to boost economic growth and end decades of uncertainty around the future of the country’s biggest aviation hub.

The headline cost incorporates around £15 billion ($20 billion) of upgrades already planned. The additional £33 billion ($44 billion) covers construction of the new runway, a rerouting of the M25 motorway, and the addition of a new terminal.

Heathrow’s bid was assessed against a competing proposal from the Arora Group, owners of nearby hotels and land. Arora estimated its project would cost under £25 billion ($33 billion), though some essential expenses were not included in that figure.

Government Sets 2035 Target for First Flights

The UK government has been accelerating aviation infrastructure approvals this year, having already supported Gatwick Airport’s additional runway in September and backed a new terminal at Luton Airport in April.

Heathrow, located west of London, is Europe’s busiest airport and currently operates at full capacity with just two runways. This compares with four each at Paris Charles de Gaulle and Frankfurt, and six at Amsterdam Schiphol.

Under the government’s plan, flights using Heathrow’s third runway are targeted to begin by 2035, with planning consent required by 2029. Officials said they selected Heathrow’s full-length runway proposal as the “most deliverable option” within the necessary timeframe.

A “swift and robust” policy review will also be carried out to ensure the expansion aligns with Britain’s climate and air quality obligations, helping the project withstand potential legal challenges that have stalled it before.

Ownership and Regulatory Clarity

Heathrow—owned by Ardian (France), Qatar Investment Authority, Saudi Arabia’s Public Investment Fund, and other investors—welcomed the government’s support but urged regulators to provide clarity on the aviation regulatory framework by mid-December to avoid delays.

Arora said it was encouraged that no single promoter had been officially selected and indicated it would revisit its plans.

Airlines Raise Concerns Over Rising Costs

Airlines including British Airways parent IAG and Virgin Atlantic have repeatedly warned that Heathrow’s already high airport charges could increase further to finance expansion.

IAG said it had “serious concerns about the affordability” of the government-backed plan and intends to work with ministers to explore ways of reducing overall costs.

The government added that details such as runway length, layout, and infrastructure implications will be finalized during the upcoming policy review.