London’s Heathrow Airport (LHA) has submitted plans to expand and modernise the airport at a cost of £49bn ($64.4bn).
The plans include a new runway measuring up to 3,500m, increased capacity to accommodate up to 756,000 flights and 150 million passengers annually. They also include a brand-new terminal, ‘T5X’, along with an expanded Terminal 2 concourse and three new satellite terminals.
LHA would allocate £21bn ($27.6bn) for new runway and airfield infrastructure - up from £14bn ($18.4bn) that was projected in 2018 - driven by inflationary pressures. An additional £12bn ($15.7bn) is earmarked for the development of Terminal 5X and expanded stand capacity.
The remaining £15bn ($19.7bn) will fund the modernisation of existing facilities, including the expansion of Terminal 2 and the phased closure of Terminal 3.
“It has never been more important or urgent to expand Heathrow,” said Thomas Woldbye, CEO of Heathrow. He reaffirmed that the airport is currently effectively operating at capacity to the detriment of trade and connectivity.
“With a green light from government and the correct policy support underpinned by a fit for purpose regulatory model, we are ready to mobilise and start investing this year in our supply chain across the country.”
Once completed, Heathrow said these expansion plans would expand the UK economy by 0.43%, while adding 50% capacity to the country’s busiest airport.
The UK government has backed plans for the third runway, with Chancellor Rachel Reeves stating that it would "make Britain the world's best-connected place to do business".
Similarly, UK Transport Secretary Heidi Alexander said she is “pleased” to have received the initial Heathrow expansion proposals – describing them as a “significant step” towards unlocking growth, creating jobs, and delivering “vital” national infrastructure.
“We'll consider the proposals carefully over the summer so that we can begin a review of the Airports National Policy Statement (ANPS) later this year,” Alexander added.
The ANPS underpins decisions on development consent, ensuring alignment with legal, environmental and climate obligations.
The government aims for a third runway to be operational by 2035. It will be up to promoters to decide when to submit a Development Consent Order, depending on the outcome of the ANPS review.
However, the plans face opposition from environmental groups, politicians, and locals. London's mayor Sir Sadiq Khan said it would have a "severe impact on noise, air pollution and meeting climate change targets".
The airport has argued that its noise footprint has reduced by 41% since 2006 and all air quality monitors around the airport are meeting limits, stating that a third runway and redesigned airspace will “give communities and passengers more certainty and reliability on flight paths”.
If the UK government implements the necessary policy changes, Heathrow plans to consult with airlines, the local community, local authorities, businesses and others from next year. A planning application is expected to be submitted in 2028.
In addition to plans submitted by the airport, the Arora Group has also submitted its “Heathrow West” proposal to the UK government, marking the first time that a competing plan for Heathrow expansion has been formally invited.
Developed with engineering firm Bechtel, the 200-page proposal outlines a new Terminal 6 and 2,800m runway, aiming for operational readiness by 2035.
The design avoids building over the M25 motorway, promising faster delivery, reduced disruption, and improved environmental outcomes.
The plan includes cost efficiencies and enhanced transport links, supporting government goals for economic growth, consumer choice, and sustainability. The full proposal will be published in due course.
IAG, the parent company of British Airways — the largest operator at Heathrow — said during its second-quarter earnings call that it will work with both parties to better understand the cost proposals
“They have just submitted two credible proposals,” IAG management said on the earnings call, stating that the company is open to different options to reduce cost, investment and complexity.
IAG management added that they are confident that Heathrow expansion will proceed, but emphasised that it represents a significant investment.
They reiterated the need for regulatory oversight to ensure affordability, warning that without control over spending, Heathrow - already the most expensive hub globally - could see passenger charges double.