BAA outlines £9.3b investment for London airports

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Ferrovial’s UK airports operator BAA has outlined plans for capital investment of around £9.3 billion ($18.6 billion) over the next 11 years at its three London airports of Heathrow, Gatwick and Stansted.

The capital investment plan was outlined today alongside an 11 year traffic forecast estimating average annual traffic growth of 2.8% across the three airports.

This growth is driven by Stansted – which runs ahead of that at Gatwick and Heathrow – and is envisaged overtaking Gatwick as London’s second busiest airport after a traffic growth spike in 2015 with the opening of its second runway and terminal.

Stansted Generation 2 is one of several major airport infrastructure projects to be undertaken as part of the £9.3 billion capital investment programme.

In total nearly £2.1 billion is earmarked for expansion at Stansted, but the lion’s share of investment - £6.2 billion - will be at Heathrow. Projects include its replacement for Heathrow terminal 2 – Heathrow East; the renovation of Heathrow terminals 3 and 4; and a second satellite for terminal 5. A further £939 million will be invested at Gatwick.

BAA CEO Stephen Nelson says: “The size and strength of BAA's balance sheet and our unrivalled experience in developing new airport facilities, give us great confidence that we can deliver this scale of investment on time and on budget.

“We now look to the regulatory authorities to deliver the stable regulatory system and sensible financial incentives necessary to deliver these plans”

BAA’s position has been under scrutiny and last month UK consumer protection body, the Office of Fair Trading, referred its study into BAA and the airports market to the UK Competition Commission.