Heathrow Snubs Runway Rival's Approach Path

The board of Britain's biggest airport has been holding secret talks about a multimillion pound swoop to acquire a rival runway expansion concept at Heathrow.

Sky News has learnt that directors of Heathrow Airport Holdings (HAH) discussed in recent days a suggestion that it should acquire the intellectual property rights held by Runway Innovations, an independent group which wants to extend - and then divide in two - the airport's existing northern runway.

People close to the discussions said that HAH decided at a board meeting last week that it would not pursue a deal at this time with Runway Innovations, which is also known as Heathrow Hub and which is fronted by Jock Lowe, a former British Airways Concorde pilot.

HAH responded to the Runway Innovations proposal in a letter sent on Friday, a source added, which said that it believed the best option for expanding Heathrow remained its own plan for a new, and entirely separate, third runway.

The talks between the two parties come ahead of a recommendation for runway expansion from the Government-appointed Airports Commission, which is due to publish its final report soon after May's General Election.

Sir Howard Davies, who is chairing the Commission and will become the new chairman of Royal Bank of Scotland (LSE: RBS.L - news) later this year, has shortlisted three options: the two variants of Heathrow expansion, and an additional runway at London's Gatwick Airport.

One source close to the situation said that Runway Innovations had been seeking at least £50m from HAH to buy it out, although it was unclear whether this included land options that could be developed to provide new rail facilities if the Heathrow Hub option is selected.

A person close to HAH, which counts some of the world's wealthiest sovereign funds among its shareholders, said the price of acquiring the rights to Runway Innovations' plans was substantially lower than £50m.

They added, however, that it could reconsider its opposition to buying its rival's idea if the Airports Commission decides to recommend Heathrow Hub as its preferred mode of growing London's creaking airport capacity.

Directors of HAH are said to believe that the noise respite afforded to local residents would be diminished under its rival's plan, something Runway Innovations is understood to dispute.

A spokesman for Runway Innovations told Sky News: "We will continue to maintain a close and cordial relationship with Heathrow as we share a belief that it is the right place for airport expansion in the UK and superior to Gatwick in all respects."

A fierce battle has broken out between Heathrow and Gatwick over the relative economic and environmental costs of creating new runway capacity at the two airports.

Responding to last week's Budget, Stewart Wingate, Gatwick's chief executive, said: "We have given a guarantee to Government that we will deliver our second runway project by 2025 and we won’t ask for public funds to help us do it.

“In contrast, Heathrow needs more than £5bn from the taxpayer for tunnelling of the M25, major work on the M4 and A4, and many rail improvements.

"The taxpayer is essentially being asked to pay twice for these projects – once through their taxes and then again through the many years of disruption they will cause."

All three of the expansion options have been assessed by the Airports Commission, with HAH's standalone third runway plan estimated to cost £18.6bn without factoring in public money for improved road and rail links; the Heathrow Hub plan has been costed at £13.5bn, with Gatwick's expansion projected to require an outlay of £9.3bn.

Heathrow's expansion is, however, regarded as offering the most substantial economic benefits in terms of job creation, while Gatwick argues that the noise impact would be far greater at its rival airport.

Business leaders have warned that the cost to the UK economy will be severe if a swift decision to implement the Commission's recommendation is not taken.

A spokesman for HAH declined to comment on its talks with Runway Innovations.