Heathrow Lands Rudd For New Three-Year Term

The owner of Heathrow Airport will announce on Wednesday that its chairman has agreed to stay on for another three years to steer the company through the most crucial period in its history.

Sky News understands that Heathrow Airport Holdings will say that Sir Nigel Rudd is to prolong his tenure until 2016, enabling it to focus on the battle to win Government backing as the location for an expansion of London's airport capacity.

The company will announce Sir Nigel's new term following a scheduled board meeting, an insider said.

One of Britain's best-known businessmen, Sir Nigel has chaired Heathrow and BAA, its predecessor, since 2007, when it owned a much larger number of British airports, including Gatwick and Stansted.

He is understood to have contemplated stepping down but decided to stay in place to argue the case for an expansion of Heathrow, which is bitterly opposed by commercial rivals, politicians and environmental campaigners.

One factor weighing in favour of Sir Nigel's decision was the fact that Invensys (LSE: ISYS.L - news) , the industrial group he chairs, is poised to be taken over by Schneider Electric (Other OTC: SBGSF - news) of France, a deal that if completed would see him step down.

As the former chairman of Boots and Pilkington, Sir Nigel has frequently been labelled a member of the club of senior boardroom figures who have overseen the sale of chunks of Britain's industrial heritage to overseas predators.

During his time at Heathrow's parent, he has brought in a number of sovereign wealth and pension funds from Canada, China and Qatar to invest alongside Ferrovial, the Spanish infrastructure group which bought BAA in 2006.

Heathrow's investors are understood to have been keen for Sir Nigel to stay on for a further term that would provide continuity during the run-up to a key Government-commissioned report on the airport capacity debate.

The company's announcement will come weeks after it set out a series of options for bolstering aviation capacity in London and the south-east, focused on a new runway at Heathrow.

It has argued to the commission led by Sir Howard Davies that such a move would be the cheapest and quickest way to fix a looming capacity crunch. Building a third runway could cost up to £18bn and would open between 2025 and 2029, Heathrow believes.

The owners of Gatwick have said that they prefer the idea of a "constellation" of London airports that would be cheaper than the proposal of Boris Johnson, the London mayor, for a newly-built airport costing well over £60bn.

A Heathrow spokesman declined to comment on Tuesday.