TRANSPORTATION: Heathrow; UK Chancellor backs 3rd runway
(HTHROW; Class A Opco; NR/BBB+/A-) (private)
UK Chancellor, Rachel Reeves, has given government support for a 3rd runway in Heathrow (as rumoured). Last estimates on cost were from 2014 and put it at £14b. It take up to 10-years to complete.
Heathrow has estimated it would be able to boost capacity to 140m passengers/yr (currently near capacity at 84m/yr). It is already the worlds 4th busiest behind Atlanta, Dallas & Dubai - globally similar sized airports use 4-6 runways.
For credit it's hardly a positive - Heathrow is already high levered and high-tariffed (latter leading to market leading margins). Next period of tariff caps will take into account any confirmed plans for capex and will likely be in negotiation with Heathrow owners and the government.
There are still number of obstacles ahead for this plan; London Mayor, Sadiq Khan, is a vocal opponent and has said he will launch a legal challenge. It will also need planning approvals.