Timing is everything

How ironic, after all these years we finally get a legal approval for the 3rd runway at Heathrow. Not for not to rehearse in depth the oddness of our planning system that allows NIMBY's to hold up major national infrastructure.

Instead to marvel at what must now be the ruins of the economic case put forward by the BAA and the airlines about how necessary this is for capacity. As I have said before, we won't be worrying about capacity as the airlines are closing rapidly and the price of slots at Heathrow, I understand, is collapsing. Heathrow currently is not even the busiest airport in Europe at the moment, having fallen behind Charles de Gaulle and Schipol. 

So of course, let's go an build a 3rd runway now. Maybe by the time it is actually done air travel will have recovered, I have a hunch though that climate change puritanism is also going to have a bigger and bigger impact in future years, now that Finance Directors have discovered how cheap zoom is. 

The hidden reason why BA would like Heathrow expansion even more than you think

Further to the post yesterday about the UK airport choice, one of the biggest supporters of Heathrow is British Airways (well, its parent company the boringly named International Airlines Group).

BA's HQ is at the Waterside building, pictured above. It is a epic paean to corporate excess. A huge sprawling building, never really filled with staff and built at a cost of £200 million in 1998. It has a long hall, shops, etc. A very nice place to work and absolutely no re-sale value whatsoever. BA has tried to put it in its Pension scheme over the years amongst other things. But a building with no real re-sale value (what other business would want a 100,000 suare foot between the M25 and the Runway at Heathrow?) it has become an albatross trapping BA in an office to big to leave and costly to maintain.

But lo, a new runway would mean the demolishing of this building and of course, a compulsory purchase order for Waterside. No doubt, being a CP, the price would be something astronomical, after all if it cost £200 million in 1998 with the rise in commercial property values surely now it would be £500m or more. Of course, BA has not far from here and also scheduled fro demolition its staff hub for the aircrews and engineers - all of this would have to go too. All at CP prices.

Thus as part of a new runway programme BA will be subsidised directly by the taxpayer to move and re-build a big chunk of its estate. Either saving them a fortune or resulting in a free upgrade of the estate that would be a huge benefit.

This over and above the massive benefit of a hub being built at their home airport anyway. No wonder Willie Walsh is so keen on Heathrow expansion.