London’s Heathrow airport, hemmed in by urban sprawl and barred from adding a new runway, is turning to bigger jets and glitzier shops to keep growing in the face of a campaign to build a rival hub on the Thames estuary.
Limited capacity at London’s Heathrow Airport costs the U.K. as much as 14 billion pounds ($22.2 billion) a year in lost trade as other European hubs boost connections to growing economies like China and Peru, the airport operator said.
London’s Heathrow airport’s 66 million annual passengers will ultimately have to foot the bill for making Europe’s busiest hub snow-proof if Britain’s winters turn permanently colder, according to owner BAA Ltd.
BAA Ltd. ’s London Heathrow airport may become less competitive against other European hubs and demand for long-haul leisure flights to the city may be hurt because of rising U.K. tax, Chief Executive Officer Colin Matthews said.
Heathrow Airport Ltd. plans to spend 3 billion pounds ($4.7 billion) in the five years to 2019 to complete its new Terminal 2 facility, add taxiways and retool the baggage system at Europe’s busiest airport.
Heathrow Airport Ltd. said Europe’s busiest aviation hub risks losing equity investors should U.K. regulators fail to approve proposals to spend 3 billion pounds ($4.7 billion) on the facility in the five years to 2019.
BAA Ltd., the owner of London’s Heathrow and Stansted airports, narrowed its first-half loss as traffic was spurred by growth in emerging markets and an alliance between British Airways and American Airlines.
London Heathrow airport is close to completing a 2.5 billion-pound ($4 billion) building project that seeks to boost service standards and repel the challenge of fast-growing rivals to a hub with little scope for more flights.