Third Runway Proposal Now Under Threat From BAA’s Financial Disarray

Just as the Government is about to launch a consultation on the proposal for a third runway at Heathrow it has been revealed that the project is in jeopardy because of the precarious financial position of Ferrovial, the Spanish company that took over BAA last year.

BAA has come under sustained and severe criticism in recent weeks for its management of Heathrow airport. A Competition Commission ruling recently criticised “unacceptable” queuing times at Heathrow Airport and said that the return on capital at BAA’s largest airports, including Heathrow, should be slashed.

BAA chief executive Stephen Nelson warned that these cuts in BAA’s profits would endanger projects such as the redevelopment of Terminals One and Two.

The Guardian newspaper reported today (4th October) that “It is understood that Ferrovial executives have also questioned whether a third runway at Heathrow would be financially viable”.

Local MP John McDonnell said “This is good news for all of us opposed to the further expansion of Heathrow Airport. We have argued for some time that a third runway would not only be an environmental disaster it also would not stack up financially. Ferrovial are clearly having second thoughts about a new runway, which puts the whole scheme in jeopardy”.

submitted by John on 11 Oct 2007 at 12:48