What a Saudi-run Heathrow will mean for passengers

Newcastle Football Club, the Independent newspaper, Rocco Forte Hotels, Selfridges, Aston Martin cars and now Heathrow Airport. Saudi Arabia is investing tens of billions of pounds in Britain, and plans to invest tens of billions more. A consortium backed by the Public Investment Fund (PIF), Riyadh’s sovereign wealth fund, is buying the 25 per cent stake in Europe’s busiest hub airport currently held by Spanish infrastructure giant Ferrovial for £2.4 billion with private investment firm Ardian.

It could up its stake further, giving the consortium majority control. The deal is expected to close before the summer. The PIF says it aims to be a “long-term partner” for the airport.

How will new money – and new Gulf thinking – transform Heathrow?

The big question for passengers, airlines and people living in west London is that of the third runway. Many airlines and politicians are pressing for the £14 billion development, to increase passenger capacity to 142 million a year – almost doubling the 81 million record achieved in 2019. It was approved in 2003, but the coalition government led by David Cameron withdrew support in 2015 after an outcry by green campaigners. Theresa May’s government reversed that decision in 2018.

Two years later the Court of Appeal ruled a third runway would be incompatible with Britain’s climate commitments. That decision was overturned by the Supreme Court later in the same year. Before he left his post as the chief executive of Heathrow 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 Atmosphere Research. “With the legal situation resolved, I hope it will finally move forward.”

But it appears that fresh Saudi billions will not be poured into new tarmac. The Sunday Times reported recently that the third runway has been shelved. Heathrow executives are understood to think that not only will environmental opposition make receiving planning permission too difficult, but also that the disruption to road traffic, especially on the M25 during the construction process, 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 seeking new ways to squeeze up to 20 million more passengers through the airport each year by 2036 without new tarmac. Heathrow badly needs more flights and more passengers. It only offers direct connections to 214 destinations – compared with 330 for Frankfurt, 328 for Paris Charles de Gaulle, and 272 for Amsterdam’s Schiphol – and has lost its crown as the world’s busiest international hub to Dubai.

But how can it attract more? New, better-located terminals and gates would help it to handle more aircraft and more passengers faster. There is no Terminal 1 – it closed a decade ago. It could be rebuilt to create space for T3, Heathrow’s oldest terminal, to be knocked down and rebuilt as a new home worthy of Virgin Atlantic, Emirates and Qantas, its main carriers. Terminals 1, 2 and 3 could form a central hub to serve all airlines except BA, which would remain in terminal 5.

Terminal 4 could be closed, which would also improve efficiency. T4 is in the wrong place – on the far side of one of the runways, rather than between them as all the other terminals are, meaning that jets leaving and arriving often have to cross a “live” runway, which causes delays.

Surinder Arora, the founder and chairman of the Arora Group, one of the UK’s largest private hotel owner-operators, is looking to introduce terminal competition at Heathrow by building a new terminal on land between T5 and the M25 motorway. It could become a new T4.

Some analysts say Heathrow should adopt “mixed mode” – using the same strip of tarmac for take-offs and landings at the same time, which is what happens at single-runway airports, such as Gatwick. To minimise noise pollution for local residents, Heathrow alternates between its runways, using one for take-offs for a few hours and then switching to landing and vice versa. Using mixed mode could increase the number of take-offs and landings by around 30 per cent, analysts say. New air traffic control systems, reducing the time gaps between take-offs and landings, would further boost the number of flights.

Such changes are unlikely to be made any time soon. Reforms in airport usage can require acts of Parliament, and financial analysts say rising costs mean there is little appetite for new building works. A new T1 and a new T3 would cost around £10 billion. That leaves technology as the main way to improve efficiency. Here, the new investors from the Gulf have an advantage.

Because all the new airports in the Gulf are so new, they have led the way in cutting-edge tech. 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 clues to what Heathrow might look like.

It only has “common use” check-in machines and desks. Departing passengers can use any of the hundreds of automated machines and bag-drop terminals for all the 29 airlines it serves. Old-fashioned paper luggage tags are being replaced with computer chips or QR codes linked to passenger booking information. This all makes it much faster to check in and reach passport control, which is the quickest in the world since it uses facial recognition. There’s no need to show your passport. Boarding is faster, too, because facial recognition is also used at the gates.

These innovations are being incorporated into the new terminals due 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 to accommodate the flag carrier, Saudia, and a new start-up carrier, Riyadh Air. Saudi airport operators are also experimenting with X-ray security arches that passengers can simply walk through with their luggage, avoiding having to put bags on a conveyor belt and through a scanner.

One change at Heathrow is likely to be low-tech. The airport may only have two runways but it is a vast site – five square miles. There is plenty of space to park jets on remote stands and bus passengers to the steps. Passengers will hate it, but if it means there are more flights and fewer delays, they may come to accept it. Especially if they need to go to Saudi Arabia. The Saudi investment is likely to make it easier for the new Riyadh Air to gain coveted slots.