Heathrow expansion: Foreign infrastructure investors emerge as winners of Airport Commission decision

Chinese, Qatari, Canadian and Spanish infrastructure investors are set to become the big winners from the recommendation by Sir Howard Davies to build a new £18 billion runway at Heathrow.

A handful of the world’s biggest investors have been buying stakes in Heathrow Airport in recent years, in anticipation that permission would be finally granted to expand the airport’s capacity.

Heathrow’s investors include an arm of the Chinese government, one of Canada’s biggest pension funds, the Singaporean sovereign wealth fund and the Qatari sovereign wealth fund, as well as the main pension fund of British universities.

But the investors want a 20-year deal on the landing fees that the airport can charge owners, if they are to commit the billions of pounds of debt and equity that will be required to build Britain’s first new runway for more than 70 years.

Any deal would irritate airlines who already pay steep fees to land at Heathrow and who have not all benefitted from the rebuilding of Terminal 2 and the construction of Terminal 5.

At present, airport fees are set every five years but Heathrow says that cycle would be “unsuitable” for at least 15 years.

It wants to see fees suspended from the point when investors first commit to the new project to the point where passengers are using the new runway.

Business supporters of Heathrow, including the CBI, the British Chambers of Commerce and the manufacturers’ organisation, the EEF, called on the Government to commit to Heathrow’s expansion immediately and get diggers in the ground by 2020.

Heathrow’s expansion plans will need about £16 billion of private funding over the next 15 years, much of which will come from the existing investors.

Gatwick’s biggest customer easyJet’s shares rose 42p or 2.7% to 1588p as the airline is backing Heathrow expansion.