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Heathrow finds potential savings of £2.5bn in third-runway plan

Heathrow Airport has outlined £2.5 billion ($3.3 billion) in potential cost savings relating to its proposed third runway and associated infrastructure.

It suggests the reduced bill means airport charges could stay “close to today’s levels”.

“The Secretary of State [Chris Grayling] set us the challenge to deliver an expanded airport for Britain with passenger charges staying close to current levels,” says the executive director of expansion at Heathrow, Emma Gilthorpe. “We have now identified potential savings of £2.5 billion and are increasingly confident we can meet the affordability challenge.”

The London airport will present the options – which it says would reduce the overall bill to £14 billion – at a public planning consultation in January.

The changes to the proposal include making use of existing public transport and baggage infrastructure by adding capacity to existing terminals rather than constructing new facilities; using advancements in technology to reduce the terminal space required; and phasing the construction more efficiently.

Heathrow states it has developed the plan “in close co-operation with the airlines”.

The latter point is relevant, as key stakeholders such as IAG have expressed concerns about the cost of expanding Heathrow.

In May, IAG chief executive Willie Walsh, his Virgin Atlantic counterpart Craig Kreeger and IATA's director general Alexandre de Juniac wrote to UK newspaper The Times warning that the runway's economic benefits "will be greatly eroded if [it] is built at an excessive price".

Their letter went on to suggest that the runway's "eye-watering" proposed cost of £17 billion "would have been enough to build and run the 2012 London Olympics twice over".

At World Routes in September, Walsh issued a further warning to airports that costs must be justified: "In the past, it would have been ‘let’s spend as much money as we can and we’ll just transfer all the costs to the airline, and those dumb f**kers will just keep paying’. Those days are over. We’re not going to do that anymore.”

The UK government said in October that it remains on track to publish final proposals for the Heathrow expansion – to be voted on in parliament – in the first half of 2018.

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