BUSINESS NEWS ANALYSIS:Government downgrades economic merits of Heathrow expansion. By Ian Taylor DfT revises third runway benefits


The government’s draft Heathrow Expansion National Policy Statement (HENPS), published last week, makes a less than compelling argument for a third runway. The Department for Transport


(DfT) document – a revision of the Aviation National Policy Statement of 2018 – “provides the basis for decision- making on any proposal to expand Heathrow”, the government said. But opponents of expansion noted


estimates of the economic impact of a third runway have been slashed and could now be outweighed by the costs and environmental impacts. The DfT now calculates a third


runway would boost UK GDP by just 0.05 per cent a year, one-10th of the level forecast by Heathrow, and notes it could be lower. Heathrow described the DfT’s


analysis as flawed, while the government hailed the statement as “a key milestone in delivering a


The DfT estimates a third runway would boost UK GDP by 0.05% – a 10th of the level forecast by Heathrow


final planning decision”. It argued an expanded Heathrow “could support over 60,000 new jobs, improve connectivity across the UK, strengthen international links . . . attract international investment . . . and deliver over £40 billion of benefits to the UK. Passengers will see fewer delays, better-value fares and more choice.” Transport secretary Heidi


Alexander said: “We’re determined to move quickly and responsibly.”


The statement does conclude


“Heathrow expansion would deliver additional connectivity and passenger benefits that support trade, business travel and consumer choice”, although the impact on passengers depends on whether they face higher costs to pay for the expansion. With the costs passed on to


passengers, the statement concludes the “environmental disbenefits outweigh total benefits”. That is partly because “the costs


Government backs new runway despite limitations


The HENPS lists “opportunities for more people to travel more often” as a “direct economic impact” of expansion. It warns of “the erosion of the UK’s hub


status” and more people “forced to change flights at a non-UK airport” if Heathrow does not expand, suggesting passengers “will see clear improvements” from a third runway because “airlines can offer more flights to the same destination at different times”. The statement suggests


additional capacity would “draw passengers away” from other UK airports, reducing congestion at these, while airlines would “no longer be able to charge the higher fares they were able to” at Heathrow. It therefore concludes


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“UK airlines and airports are forecast to be less profitable with Heathrow expansion”. The wider economic benefits include


the increased “attractiveness of London and the southeast” for international businesses and growth in airport, retail and hospitality employment. Transport secretary Heidi Alexander told


Heidi Alexander


MPs the government considers Heathrow expansion “critical to national growth” and it could “support growth across the UK”. But the HENPS estimates it would increase annual ‘real’ GDP, allowing for inflation, by just 0.052% by 2056 – and the impact could be as low 0.028% – while the “overwhelming benefit” would go to London.


of environmental disbenefits are greater” than in the 2018 economic appraisal, which included “only carbon emissions from airport operations, surface access transport and construction – now aviation carbon emissions are included too”. The CAA, which sets Heathrow’s


charging regime for airlines, has already concluded expansion costs will be passed on to passengers – it just has to decide by how much. The HENPS concludes expansion


“will deliver a range of passenger benefits and wider economic benefits”. However, it states: “These come


with an impact, primarily reductions in profits at airports and airlines around the UK, and the overall environmental costs [in] carbon, air quality and additional noise. “This leaves the overall net social


benefit as negative, and the ‘net present value’ [a financial measure] even more negative.”


Aviation eco body criticises ‘rushed’ consultation period


The Aviation Environment Federation described the consultation on the statement as “rushed”, noting it allows “only 10 weeks over the summer recess to respond to a technically complex document of 136 pages, with supporting material comprising more than 1,000 pages of technical detail”. The consultation ends on September 1. The draft


HENPS will also be subject to scrutiny by a select committee of MPs, and the government will consider both sets of responses before presenting a final version to Parliament for a vote. Ministers aim to have this settled “by the end of 2026” – a tight deadline. The DfT said it anticipates a final decision “in the


first half of 2029”.


25 JUNE 2026


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PICTURES: Shutterstock/Andy Soloman, Novikov Aleksey


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