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Heathrow Says Halting New Runway Would Be Financial Suicide

Heathrow Says Halting New Runway Would Be Financial Suicide

(Bloomberg) -- London Heathrow airport stepped up its defense of a $20 billion third runway, saying a government decision to block the project would amount to “financial suicide” and hamper U.K. efforts to boost trade after Brexit.

Chief Executive Officer John Holland-Kaye sees a larger Heathrow, opposed by campaigners and some politicians because of its environmental impact, as “essential for a global Britain.” Thwarting the plan will only benefit competing economies such as France, he said in an interview on Wednesday.

Paris Charles de Gaulle airport is already set to take the title of Europe’s busiest hub from Heathrow within two years, the CEO said, with the London site unable to respond due to a lack of spare capacity.

Heathrow’s expansion is in doubt after Prime Minister Boris Johnson, who fought against the runway as London mayor, said earlier this month he saw no immediate prospect of the strip getting built. That’s after he warned before December’s election that the project had yet to satisfy legal obligations on noise and air pollution.

“You can’t have a plan for trade deals with India and China without expanding Heathrow,” Holland-Kaye said. “It doesn’t compute. If goods and people aren’t flying out of an expanded Heathrow they’ll fly through Paris. You’re taking back control with one hand and giving it back to the French with the other.”

Heathrow’s bid to serve 142 million passengers a year -- up from almost 81 million now -- is in the balance despite winning the support of lawmakers in a 2018 vote. The new runway was also backed by a state-appointed commission that dismissed Johnson’s own proposal for a new hub in the Thames estuary.

While the prime minister recently backed the 100 billion-pound ($129 billion) HS2 high-speed rail project, he has continued to push back against Heathrow’s plans. Asked on Feb. 11 if the runway would now go ahead, he said: “I see no bulldozers at present, nor any immediate prospect of them arriving.”

Holland-Kaye said opposition to enlarging Heathrow on environmental grounds is misplaced.

“CO2 is a big issue but there is no conflict in expanding flights if we can de-carbonize aviation,” he said. “The idea that the answer is to stop flying and that India, China and the U.S. will follow suit is barmy.”

Heathrow’s expansion faces a challenge Thursday when the Court of Appeal reviews the rejection of lawsuits from Friends of the Earth, London Mayor Sadiq Khan and other parties who say approval of the runway plan violated U.K. climate change policy and didn’t take account of the Paris climate accord.

Johnson’s spokesman, James Slack, told reporters on Wednesday that the Heathrow runway “is a private-sector project,” while reiterating that it must show it can meet air-quality and noise obligations “in order to proceed.”

(Updates with looming court decision in 10th paragraph, comment from Johnson spokesman in last)

To contact the reporters on this story: Christopher Jasper in London at cjasper@bloomberg.net;Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker, Andrew Noël

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