A rival company could be given the go-ahead to build Heathrow’s third runway, after the aviation regulator shortlisted an “alternative developer model” as one of four options for expanding the west London airport. The Civil Aviation Authority (CAA) has proposed allowing a developer other than Heathrow Airport Limited (HAL) to build, own and operate a new runway and terminal, a move that would open the door for hotel tycoon Surinder Arora’s Heathrow West proposal.
The alternative developer option
The Arora Group’s Heathrow West plan, developed through its dedicated company Heathrow West Limited, envisages a 2,800-metre runway and a new Terminal 6. Crucially, it would not require relocating the M25 motorway, unlike HAL’s own scheme. The group has partnered with global construction firm Bechtel and estimates the project would cost around £25 billion, potentially saving up to £10 billion compared with HAL’s blueprint.
An alternative developer would put the Arora Group in direct competition with HAL, which is owned by a consortium of international institutional investors. Heathrow Airport Holdings Limited’s largest shareholder is the private equity giant Ardian, which holds 32.61%, followed by the Qatar Investment Authority (20%), Saudi Arabia’s Public Investment Fund (15.01%), GIC of Singapore (11.20%), Australian Retirement Trust (11.18%) and China Investment Corporation (10%).
HAL has argued strongly that keeping expansion under a single operator would be more efficient and that splitting control could undermine investment and delay economic benefits. A Heathrow spokesperson said the company supports regulatory reform that “boosts efficiency, cuts red tape and keeps investment flowing” but does not support proposals that would “undermine our efforts to improve the airport for consumers or delay the economic growth the country needs”.
The implementation of the alternative developer model would depend on amendments to the government’s Airports National Policy Statement (ANPS) – a consultation on proposed changes is expected by July – and on the developer obtaining planning permission. The CAA has provisionally approved HAL to recover up to £320 million in early expansion planning costs incurred during 2025 and 2026, while it has confirmed that Heathrow West Ltd may recover up to £4.3 million in early costs, underlining the regulator’s recognition of both proposals as credible.
Heathrow Airport Limited’s plan
HAL’s own scheme involves a full-length 3,500-metre runway that would require moving the M25 motorway at an estimated cost of £1.5 billion. The runway project alone is put at £33 billion, with the wider expansion including new terminals and upgraded infrastructure reaching an estimated £49 billion – described as the largest privately financed infrastructure project in Europe. The plan would increase Heathrow’s capacity to 756,000 flights and 150 million passengers per year, opening up at least 30 new destinations and allowing more frequent services on existing routes.
Transport Secretary Heidi Alexander announced her preference for a full-length runway in November, and the government has described HAL’s proposal as the “most credible and deliverable option”. The government has selected HAL’s scheme as the basis for reviewing the ANPS and aims to reach a planning decision by 2029, with the potential for a third runway to be operational by 2035. Expansion is projected to boost UK GDP by approximately 0.43% by 2050 and deliver £30 billion in economic benefits, while creating thousands of new jobs. However, the plans face scrutiny over their alignment with the UK’s climate change obligations, air quality and noise targets; the government has requested advice from the Climate Change Committee to ensure consistency with the country’s decarbonisation pathway.
Consultation and other options
The CAA’s shortlist includes three other models beyond the alternative developer. One option is improving the existing regulatory framework for the airport, such as more rigorous scrutiny of spending. Another would create a model to support cost-effective longer-term financing. The final option would impose new obligations on HAL to competitively tender elements of the expansion – potentially allowing a third party to design and build assets – while retaining overall responsibility for coordinating and financing the work.
A public consultation on the four shortlisted options is open until June 15. The review of the Airports National Policy Statement is ongoing, with proposed amendments scheduled for public consultation by summer 2026. The CAA, which regulates flight paths, air traffic services and airport charges at London airports, will consider responses before deciding which option to pursue.
Heathrow has recently been recognised as Europe’s most punctual major airport, with over 97% of passengers clearing security in under five minutes. Despite this, a campaign backed by travel trade bodies called “Heathrow Reimagined” is calling for a review of the airport’s regulation to ensure better value for money for passengers, citing high charges relative to the experience provided.
