Surinder Arora slams Heathrow's £49 billion runway expansion costs

Highlights

• Heathrow seeks £71m in early planning costs versus Arora's £4m estimate.
• Passengers may pay for expenses through higher landing charges even if runway isn't built.
• IAG warns consumers will pay twice after previous £500m runway costs were recovered.

Hotel tycoon Surinder Arora has accused Heathrow Airport of "taking people for a ride" over planning costs for its £49 bn third runway expansion project.

The founder and chairman of Arora Hotels Group criticised the airport's request to recoup £71 m in early planning costs for 2025 alone, compared to his rival bid's estimated expenses of around £4 m.

"This is classic Heathrow gold-plating," Arora told The Times. "It's Heathrow all along. They just want a money-making machine. People don't realise they are being taken for a ride."

The Civil Aviation Authority (CAA) consultation document revealed Heathrow is seeking to recover a total of £320 m in costs for this year and next, recently updated to nearly £400 m.

These expenses would be passed on to passengers through higher landing charges, even if the runway never gets built.

Runway controversy details

Heathrow's government-approved scheme includes a 3,500-metre runway and sixth terminal costing £33 bn, requiring extensive M25 motorway tunnelling works.

Arora's alternative proposal features a 2,800-metre runway and terminal priced at £23 bn. Despite the complexity differences, Arora dismissed this as justification for the cost gap. He offered to drop reimbursement claims if Heathrow did the same, saying he wanted "a level playing field".

British Airways parent company IAG has objected to the cost recovery plan, arguing it transfers commercial risk from promoters to airlines. The airline group highlighted that passengers already paid over £500 m for Heathrow's previous failed runway attempt before Covid.

Heathrow defended its spending, stating actual 2025 costs were £33 m. A spokesman said detailed assessments were necessary to meet the government's 2029 planning permission deadline, adding the airport had requested planning reforms.

The CAA's proposal to cap recoverable costs at £320 m has sparked controversy amongst airline customers, with Heathrow's owners including infrastructure groups and sovereign wealth funds from Qatar, Saudi Arabia, Singapore and China set to benefit from regulated returns.