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Billionaire takes on Heathrow with plan for cut-price expansion
Billionaire takes on Heathrow with plan for cut-price expansion

Yahoo

time2 days ago

  • Business
  • Yahoo

Billionaire takes on Heathrow with plan for cut-price expansion

A billionaire hotel entrepreneur is spearheading a rival proposal to expand Heathrow, as he vows to deliver the project more cheaply than the airport would. Surinder Arora is drawing up plans for the project after Mike Kane, the aviation minister, said last week that the Government was open to alternative bids to build a third runway. As one of the biggest landowners at Heathrow through his eponymous property empire, Mr Arora has teamed up with US engineering giant Bechtel to forge ahead with his development bid. 'The Government has asked for submissions this summer and we will be there,' he told The Telegraph. Mr Arora welcomed the comments from Mr Kane, who has confirmed that ministers had 'asked for Heathrow or a third party' to present alternative runway proposals. 'It's exactly what we've been asking for,' said Mr Arora, who previously led a rival expansion bid in 2018. 'We have said previously that we could do Heathrow between 32pc and 34pc cheaper,' he said. 'Obviously, times have moved on, but I think we will look to push on that. 'We can deliver the whole thing, and without a shadow of a doubt, we'd build it cheaper than Heathrow Airport Limited. 'This will give the airlines and passengers the chance to make a choice.' Mr Arora signalled that he has already enlisted hundreds of consultants to work on the project, which could include plans for a shorter third runway. However, he has vowed to listen to what airlines want before submitting his proposal. The possibility of a shorter airstrip at Heathrow has emerged as a potential alternative to the airport's more ambitious plans, which some claim could cost up to £ a runway could both slash costs and shave years off the project's completion date by removing the need to divert the M25, Britain's busiest motorway, under the new strip. Like Mr Arora, Heathrow is also working on a proposal. But this is expected to include plans for a full-length runway. While that blueprint is enshrined in an Airports National Policy Statement (ANPS) adopted by Parliament in 2018, estimated costs are understood to have swelled from £14bn at 2014 prices to between £42bn and £63bn. A truncated runway would impose limits on the planes able to use it, but would nevertheless find favour with airlines that have pushed back against paying for the pricier option. The boss of one major carrier, speaking at the IATA industry gathering in Delhi last week, said the latest costing for the full-scale plan would require what he called an 'eye-watering' increase in ticket prices of between £75 to £100. Sir Tim Clark, head of Emirates, the world's biggest long-haul airline, said at the same event that he was against diverting the M25 and would back a shorter runway 'for landing purposes or single-aisle aircraft, anything to declutter what's there'. Heathrow Reimagined, a campaign group that includes British Airways (BA) and Virgin Atlantic, said it 'welcomes competition and alternative proposals designed to increase capacity at the airport more efficiently'. BA, which operates about half of the flights at Heathrow, declined to specify its favoured option but said 'a solution should consider the airport boundaries, runway length, total project cost and the impact on consumers.' Willie Walsh, the former chief of parent group IAG, said in 2017 that spanning the motorway would add unnecessary cost and complexity. 'Airlines were never consulted on the runway length and they can operate perfectly well from a slightly shorter runway,' he said. According to stipulations in the ANPS, Heathrow's third runway should have a length of 'at least 3,500m' that would be able to handle 260,000 extra flights or more each year. However, a strip measuring 3.2km could accommodate 90pc of flights, according to the boss of a UK airline speaking at the same event in India, who described the prospect of diverting the M25 as 'scary'. Heathrow's northern runway stretches for 3.9km, making it the longest active landing airstrip in the UK, while the southern one measures almost 3.7km. Reports in March suggested that Heathrow itself was looking seriously at modifying its pending submission to the Government to feature a shorter runway in order to cut costs. However, Heathrow chief Thomas Woldbye denied that it was the case, saying that he intended to deliver the longer runway specified and that ripping up the busiest two-mile stretch of the M25 could not be avoided. What remains unclear is how much weight the Government will give to reducing delivery costs versus the extra time in planning that a radical alternative to the previous proposals might require. Rachel Reeves, the Chancellor, said in January she wanted to see 'spades in the ground' on the project before the next general election and the start of flights by 2035. Departing from the requirements of the ANPS could mean that the planning process would be lengthier. The outcome of a Civil Aviation Authority (CAA) review of Heathrow's mechanism for charging airlines in the context of the third runway will also be of fundamental importance. Heathrow Reimagined is pressing ministers to abandon rules under which money spent on the airport can be charged directly to airlines through increased fees. While those fees are regulated by the CAA, carriers say the system provides no incentive for Heathrow to wring efficiencies from infrastructure projects. In his comments, reported in the London Standard, Mr Kane declined to say if Heathrow shareholders, airlines or passengers should foot the bill. Meanwhile, a Labour insider said Mr Kane's comments were intended to convey a willingness to introduce competition into the runway process, rather than a pledge to do so. However, it appears the ball may already be rolling. 'Heathrow is a huge business, and competition is a good thing,' said Mr Arora. 'We're not here to slow or delay things. We will do whatever is necessary.' The Department for Transport said that while Heathrow Airport had previously been deemed the only credible party able to deliver the runway project in its entirety, it remains open-minded and will treat other proposals fairly. A spokesman said: 'There is no live planning application for Heathrow expansion at present, but when plans come forward, we will ensure any expansion is assessed against the Government's legal, carbon and environmental obligations.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Billionaire takes on Heathrow with plan for cut-price expansion
Billionaire takes on Heathrow with plan for cut-price expansion

Telegraph

time3 days ago

  • Business
  • Telegraph

Billionaire takes on Heathrow with plan for cut-price expansion

A billionaire hotel entrepreneur is spearheading a rival proposal to expand Heathrow as he vows to deliver the project a third cheaper than the airport would. Surinder Arora is drawing up plans for the project after Mike Kane, the aviation minister, said last week that the Government was open to alternative bids to build a third runway. As one of the biggest landowners at Heathrow through his eponymous property empire, Mr Arora has teamed up with US engineering giant Bechtel to forge ahead with his development bid. 'The Government has asked for submissions this summer and we will be there,' he told The Telegraph. Mr Arora welcomed the comments from Mr Kane, who has confirmed that ministers had 'asked for Heathrow or a third party' to present alternative runway proposals. 'It's exactly what we've been asking for,' said Mr Arora, who previously led a rival expansion bid in 2018. 'We have said previously that we could do Heathrow between 32pc and 34pc cheaper,' he said. 'Obviously, times have moved on, but I think we will look to push on that. 'We can deliver the whole thing, and without a shadow of a doubt, we'd build it cheaper than Heathrow Airport Limited. 'This will give the airlines and passengers the chance to make a choice.' Mr Arora signalled that he has already enlisted hundreds of consultants to work on the project, which could include plans for a shorter third runway. However, he has vowed to listen to what airlines want before submitting his proposal. Shorter, cheaper, quicker The possibility of a shorter airstrip at Heathrow has emerged as a potential alternative to the airport's more ambitious plans, which some claim could cost up to £63bn. Such a runway could both slash costs and shave years off the project's completion date by removing the need to divert the M25, Britain's busiest motorway, under the new strip. Like Mr Arora, Heathrow is also working on a proposal. But this is expected to include plans for a full-length runway. While that blueprint is enshrined in an Airports National Policy Statement (ANPS) adopted by Parliament in 2018, estimated costs are understood to have swelled from £14bn at 2014 prices to between £42bn and £63bn. A truncated runway would impose limits on the planes able to use it, but would nevertheless find favour with airlines that have pushed back against paying for the pricier option. The boss of one major carrier, speaking at the IATA industry gathering in Delhi last week, said the latest costing for the full-scale plan would require what he called an 'eye-watering' increase in ticket prices of between £75 to £100. Sir Tim Clark, head of Emirates, the world's biggest long-haul airline, said at the same event that he was against diverting the M25 and would back a shorter runway 'for landing purposes or single-aisle aircraft, anything to declutter what's there'. Heathrow Reimagined, a campaign group that includes British Airways (BA) and Virgin Atlantic, said it 'welcomes competition and alternative proposals designed to increase capacity at the airport more efficiently'. BA, which operates about half of the flights at Heathrow, declined to specify its favoured option but said 'a solution should consider the airport boundaries, runway length, total project cost and the impact on consumers.' Willie Walsh, the former chief of parent group IAG, said in 2017 that spanning the motorway would add unnecessary cost and complexity. 'Airlines were never consulted on the runway length and they can operate perfectly well from a slightly shorter runway,' he said. According to stipulations in the ANPS, Heathrow's third runway should have a length of 'at least 3,500m' that would be able to handle 260,000 extra flights or more each year. However, a strip measuring 3.2km could accommodate 90pc of flights, according to the boss of a UK airline speaking at the same event in India, who described the prospect of diverting the M25 as 'scary'. Heathrow's northern runway stretches for 3.9km, making it the longest active landing airstrip in the UK, while the southern one measures almost 3.7km. Reports in March suggested that Heathrow itself was looking seriously at modifying its pending submission to the Government to feature a shorter runway in order to cut costs. However, Heathrow chief Thomas Woldbye denied that it was the case, saying that he intended to deliver the longer runway specified and that ripping up the busiest two-mile stretch of the M25 could not be avoided. 'Competition is a good thing' What remains unclear is how much weight the Government will give to reducing delivery costs versus the extra time in planning that a radical alternative to the previous proposals might require. Rachel Reeves, the Chancellor, said in January she wanted to see 'spades in the ground' on the project before the next general election and the start of flights by 2035. Departing from the requirements of the ANPS could mean that the planning process would be lengthier. The outcome of a Civil Aviation Authority (CAA) review of Heathrow's mechanism for charging airlines in the context of the third runway will also be of fundamental importance. Heathrow Reimagined is pressing ministers to abandon rules under which money spent on the airport can be charged directly to airlines through increased fees. While those fees are regulated by the CAA, carriers say the system provides no incentive for Heathrow to wring efficiencies from infrastructure projects. In his comments, reported in the London Standard, Mr Kane declined to say if Heathrow shareholders, airlines or passengers should foot the bill. Meanwhile, a Labour insider said Mr Kane's comments were intended to convey a willingness to introduce competition into the runway process, rather than a pledge to do so. However, it appears the ball may already be rolling. 'Heathrow is a huge business, and competition is a good thing,' said Mr Arora. 'We're not here to slow or delay things. We will do whatever is necessary.' The Department for Transport said that while Heathrow Airport had previously been deemed the only credible party able to deliver the runway project in its entirety, it remains open-minded and will treat other proposals fairly. A spokesman said: 'There is no live planning application for Heathrow expansion at present, but when plans come forward, we will ensure any expansion is assessed against the Government's legal, carbon and environmental obligations.'

Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise
Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise

Yahoo

time20-05-2025

  • Business
  • Yahoo

Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise

Early Bird Registration Now Open for the UK's Foremost Hospitality Investment Event Where Leaders Gather to Learn, Network and be Inspired LONDON, May 20, 2025 (GLOBE NEWSWIRE) -- Questex's Annual Hospitality Conference (AHC), the UK's leading event for hospitality investment, asset management and operations, returns to Manchester Central Convention Complex on 29–30 September 2025. Now in its 22nd year, AHC brings together senior industry leaders, investors and decision-makers from across the UK hospitality sector. The 2025 theme Rest. Rebuild. Rise. reflects a pivotal moment for the industry as it moves beyond recovery. The programme will explore how shifting economic and societal forces are prompting a reimagining of long-standing models. From hotels and serviced living to F&B and wellness, AHC 2025 will spotlight the strategies and innovations shaping the sector's next chapter. Register here. Why now? The UK hospitality sector is entering a new phase of opportunity. Improved visibility on interest rates, renewed lender confidence and a clearer view on asset values are helping to unlock deal activity. Investors are repositioning assets, capitalising on adaptive reuse and exploring new income streams across hotels, serviced living and F&B. At the same time, operators are focused on profitability, procurement and performance under pressure. AHC 2025 provides a timely forum to examine where capital is flowing, how developments are being financed and what strategies are delivering real returns. Backed by over two decades of market insight, AHC delivers a focused programme built on three pillars: ideate, invest and perform. Each is tailored to the needs of UK-based owners, developers, investors and operators. AHC 2025 is expected to welcome more than 1,100 senior leaders from across the UK hospitality sector, including hotel owners, investors, developers, asset managers, advisors, F&B operators and leaders from alternative hospitality models. The event will feature targeted networking sessions designed to connect capital with opportunity, foster new partnerships and support deal-making across the full spectrum of UK hospitality. 'AHC continues to be the meeting place for the UK's most committed hospitality leaders,' said Alexi Khajavi, Group President, Hospitality and Wellness, Questex. 'What sets AHC apart is its sharp focus on UK market realities and its ability to dig into the detail that drives deals and performance. This year's theme captures the mood of the moment, one of reinvention, resilience and readiness to lead.' AHC 2025 Highlights: A revitalised programme shaped around three core pillars: Ideate, Invest, Perform. The agenda blends strategic insight with operational depth, offering attendees a clear view of the opportunities and challenges facing UK hospitality. Among the speakers confirmed to date: Surinder Arora, Founder & Executive Chairman, Arora Group Dave Hart, CEO, RBH Hospitality Tim Rumney, CEO, BWH Hotels GB Edwin Liu, Managing Director, Chief Investment Officer, Heeton Holdings Ltd William Hobbs, Economist, Barclays Aoife Roche, Regional Vice-President, Sales - EMEA, STR A dynamic exhibition floor featuring leading suppliers, service providers and solutions specialists who are redefining performance, sustainability and guest experience across hospitality asset types. Focused networking through curated roundtables, tech talks, investor workshops and new interactive formats that help turn conversations into partnerships and deals. For more information about AHC 2025 and to register, visit Early Bird rate registration ends 23 May. For sponsorship opportunities, click here. Stay connected with AHC on Linkedin, X, Instagram and follow #AHC2025. About AHC The Annual Hospitality Conference (AHC) is the UK's leading event for hospitality investment, operations and asset management. Held in Manchester, AHC unites senior industry decision-makers from across the UK to explore the strategies, data and innovations shaping the market. With two days of high-impact content, curated networking and deal-making opportunities, AHC is where the brightest in UK hospitality gather to reset, rebuild and rise. AHC 2025 takes place 29–30 September at Manchester Central Convention Complex. About QuestexQuestex helps people live better and longer. Questex brings people together in the markets that help people live better: hospitality and wellness; the industries that help people live longer: life science and healthcare; and the technologies that enable and fuel these new experiences. We live in the experience economy – connecting our ecosystem through live events, surrounded by data insights and digital communities. We deliver experience and real results. It happens here. Media ContactsKirsty McKennaAHCkmckenna@ Nav KumararatneAHCnkumararatne@

Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise
Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise

Yahoo

time20-05-2025

  • Business
  • Yahoo

Questex's AHC 2025 Calls UK Hospitality to Reset, Rebuild and Rise

Early Bird Registration Now Open for the UK's Foremost Hospitality Investment Event Where Leaders Gather to Learn, Network and be Inspired LONDON, May 20, 2025 (GLOBE NEWSWIRE) -- Questex's Annual Hospitality Conference (AHC), the UK's leading event for hospitality investment, asset management and operations, returns to Manchester Central Convention Complex on 29–30 September 2025. Now in its 22nd year, AHC brings together senior industry leaders, investors and decision-makers from across the UK hospitality sector. The 2025 theme Rest. Rebuild. Rise. reflects a pivotal moment for the industry as it moves beyond recovery. The programme will explore how shifting economic and societal forces are prompting a reimagining of long-standing models. From hotels and serviced living to F&B and wellness, AHC 2025 will spotlight the strategies and innovations shaping the sector's next chapter. Register here. Why now? The UK hospitality sector is entering a new phase of opportunity. Improved visibility on interest rates, renewed lender confidence and a clearer view on asset values are helping to unlock deal activity. Investors are repositioning assets, capitalising on adaptive reuse and exploring new income streams across hotels, serviced living and F&B. At the same time, operators are focused on profitability, procurement and performance under pressure. AHC 2025 provides a timely forum to examine where capital is flowing, how developments are being financed and what strategies are delivering real returns. Backed by over two decades of market insight, AHC delivers a focused programme built on three pillars: ideate, invest and perform. Each is tailored to the needs of UK-based owners, developers, investors and operators. AHC 2025 is expected to welcome more than 1,100 senior leaders from across the UK hospitality sector, including hotel owners, investors, developers, asset managers, advisors, F&B operators and leaders from alternative hospitality models. The event will feature targeted networking sessions designed to connect capital with opportunity, foster new partnerships and support deal-making across the full spectrum of UK hospitality. 'AHC continues to be the meeting place for the UK's most committed hospitality leaders,' said Alexi Khajavi, Group President, Hospitality and Wellness, Questex. 'What sets AHC apart is its sharp focus on UK market realities and its ability to dig into the detail that drives deals and performance. This year's theme captures the mood of the moment, one of reinvention, resilience and readiness to lead.' AHC 2025 Highlights: A revitalised programme shaped around three core pillars: Ideate, Invest, Perform. The agenda blends strategic insight with operational depth, offering attendees a clear view of the opportunities and challenges facing UK hospitality. Among the speakers confirmed to date: Surinder Arora, Founder & Executive Chairman, Arora Group Dave Hart, CEO, RBH Hospitality Tim Rumney, CEO, BWH Hotels GB Edwin Liu, Managing Director, Chief Investment Officer, Heeton Holdings Ltd William Hobbs, Economist, Barclays Aoife Roche, Regional Vice-President, Sales - EMEA, STR A dynamic exhibition floor featuring leading suppliers, service providers and solutions specialists who are redefining performance, sustainability and guest experience across hospitality asset types. Focused networking through curated roundtables, tech talks, investor workshops and new interactive formats that help turn conversations into partnerships and deals. For more information about AHC 2025 and to register, visit Early Bird rate registration ends 23 May. For sponsorship opportunities, click here. Stay connected with AHC on Linkedin, X, Instagram and follow #AHC2025. About AHC The Annual Hospitality Conference (AHC) is the UK's leading event for hospitality investment, operations and asset management. Held in Manchester, AHC unites senior industry decision-makers from across the UK to explore the strategies, data and innovations shaping the market. With two days of high-impact content, curated networking and deal-making opportunities, AHC is where the brightest in UK hospitality gather to reset, rebuild and rise. AHC 2025 takes place 29–30 September at Manchester Central Convention Complex. About QuestexQuestex helps people live better and longer. Questex brings people together in the markets that help people live better: hospitality and wellness; the industries that help people live longer: life science and healthcare; and the technologies that enable and fuel these new experiences. We live in the experience economy – connecting our ecosystem through live events, surrounded by data insights and digital communities. We deliver experience and real results. It happens here. Media ContactsKirsty McKennaAHCkmckenna@ Nav KumararatneAHCnkumararatne@

Airlines voice significant concerns about Heathrow third runway amid ‘service issues'
Airlines voice significant concerns about Heathrow third runway amid ‘service issues'

The Independent

time20-03-2025

  • Business
  • The Independent

Airlines voice significant concerns about Heathrow third runway amid ‘service issues'

Airlines have voiced significant concerns about Heathrow's proposed third runway, questioning its effectiveness given the airport's current operational model. A recent survey of 50 airlines operating at the west London airport revealed that 90 per cent believe Heathrow 's functionality as a hub is being hampered. Among the key issues raised were the standard of services provided and a perceived lack of engagement with airlines. Heathrow's Airline Operators Committee (AOC), representing the airport's airlines and the body that commissioned the research, argues that these shortcomings render a third runway "unaffordable" under the existing system. Heathrow, in response, acknowledged the need for "adjustments to the regulatory model," while maintaining that both airlines and passengers currently "get good value for money." More than two out of three (67 per cent) airlines agreed that the airport's operation stifles their ability to increase investment. Some 60 per cent of respondents believe Heathrow's service levels inside terminals is worse than at other major airports, with claims of long security lines, baggage system failures and poor treatment of passengers with restricted mobility. Chancellor Rachel Reeves gave her backing for Heathrow's third runway project in a speech on growth in January. The airport responded by saying it would submit detailed plans to the Government in the summer. The cost of the project was estimated at £14 billion in 2014, but this is likely to have risen sharply. Heathrow's AOC is part of the Heathrow Reimagined campaign, which is calling on the Civil Aviation Authority (CAA) to reform how the airport is regulated. Among the other organisations represented by the body are British Airways' owner International Airlines Group (IAG), Virgin Atlantic and tycoon Surinder Arora, who operates a number of hotels serving the airport. The campaign claims Heathrow is the world's most expensive airport for charges, with airlines paying £1.1 billion more each year than if fees were in line with equivalent major European airports. Airlines typically pass charges on to passengers through fares. Nigel Wicking, chief executive of Heathrow's AOC, told the PA news agency the results of the survey reflect 'the performance challenges airlines have day to day at Heathrow'. He said: 'When you when you look at that relative to the amount we spend at Heathrow, something's going wrong. 'We're spending a lot of money, it is the most expensive airport for charges, and yet the quality of service keeps on dropping, whether that's loss of bags, congestion or lack of availability of check-in space.' He said New York's JFK airport offers a 'far better experience' because it has refreshed all its terminals within a 27-year period, whereas at Heathrow, Terminal 3 is more than 60 years old and Terminal 4 is nearly 40 years old. The regulatory asset base (Rab) model used at Heathrow allows it to charge fees to airlines based on infrastructure improvement plans agreed with the CAA and permitted rates of return for investors. Mr Wicking said: 'They've realised what they're sitting on in terms of the asset that is Heathrow, and with the regulatory model they've worked out how to make really good money. 'If they can get money onto the Rab – if they get capital spend – they will have a really good return on that capital spend, which is obviously very attractive to their shareholders but it doesn't drive efficiency. 'Whenever I see an another capital plan coming across my table for Heathrow to invest in, I just look to the skies and think 'where do you get these numbers from' because some of them are absolutely ludicrous.' He added: 'The (airlines) do want expansion but it cannot be at any price. 'The current price is already too much. 'If you extrapolate that to the kind of spend we're talking about for a third runway and terminals, it would just make it unaffordable.' Heathrow reported pre-tax profits of £917 million for 2024, up 31 per cent from £701 million in 2023. In December 2024, French company Ardian completed a deal to become Heathrow's largest shareholder with a 23% stake, while Saudi Arabia's sovereign wealth fund purchased a 15 per cent share. Mr Arora claimed Heathrow bosses 'take advantage of the monopoly' position as the UK's only major hub airport. He gave examples – disputed by Heathrow – of the airport charging airlines £76,000 to remove three trees, spending £1.1 million on a smoking shelter at Terminal 4, and charging more than half a million each for two disabled toilets. He said: 'We are 110 per cent behind the Chancellor and the Government for expansion, for growth, except just a couple of caveats. 'We must do it for the right reasons, and we must do it for the benefit of the nation, and not for the benefit of lining the shareholders' pockets. 'We must make sure that we get value for money.' A spokesperson for Heathrow said: 'Every penny invested in infrastructure at Heathrow is approved by airlines and our regulator. 'We agree adjustments to the regulatory model are needed to deliver a third runway, but airlines and passengers get good value for money at Heathrow. 'Our operational performance is good and improving, and the value we provide to airlines and passengers is easily seen by how many airlines want to include Heathrow in their network. 'Expanding Heathrow will drive a further step change and address many of the challenges identified with operating an airport that is already at full capacity.' Heathrow recorded a 6 per cent rise in the number of passengers travelling through its four terminals last year, to 83.9 million.

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