Heathrow Airport may follow in the footsteps of Thames Water's issues, according to Surinder Arora.

Hotel Billionaire Challenges Heathrow's Monopoly with Proposed Third Runway

In a bold move, hotel billionaire Surinder Arora has launched a bid to build Heathrow's third runway, aiming to break a decades-old monopoly held by Heathrow Airport Limited (HAL). Arora's proposal, dubbed 'Heathrow West', was submitted to the Department for Transport at the end of July.

Arora is critical of HAL's regulatory model, claiming it incentivizes gold-plating of every development and has led to underperformance at Heathrow Airport. He points out a significant discrepancy in fees for water and waste disposal between a hotel within Heathrow's jurisdiction and one outside, with the former paying £23 a unit and the latter paying just over £2.60 a unit.

The proposal for Heathrow West includes a shorter runway of 2,800m, compared to HAL's proposed 3,500m runway. Scott Brownrigg, the architect for one of the largest new terminals of the last decade in Istanbul, is leading on design for Heathrow West. The plan also includes a new Terminal 6 immediately to the west of Terminal 5.

Arora argues that a 2,800m runway will carry 97% of the amount of traffic of HAL's all-singing, all-dancing alternative, with the remaining traffic easily absorbed by the other two runways. Bechtel, an aviation and infrastructure consultant behind 200 airport projects worldwide, is working with Arora on Heathrow West.

Changi Airport, which regularly tops Skytrax rankings, is also on board with Heathrow West. Both proposals for Heathrow's third runway are privately funded.

Transport secretary Heidi Alexander fired the starting gun on the project's bidding process in June, confirming that the government would accept proposals from multiple 'promoters'. Chancellor Rachel Reeves endorsed three airport expansion projects, including Heathrow's third runway, in January this year.

Arora has assembled a team of aviation experts for Heathrow West, including Mike Clasper, Rod Addington, Rob Webb QC, and the last ever Concorde captain. He does not have any commercial interest in transport beyond the expansion's potential positive impact on his surrounding hotels.

British Airways-owner IAG has branded the Heathrow West proposal as 'credible'. However, the government authority that may decide next month whether Arora gets the rights to build the third runway system at Heathrow Airport and whether this system will replace the one by Heathrow Airport Limited is not explicitly named in the available search results.

Arora compares the management of Heathrow Airport to cautionary tales of infrastructure in Britain, such as HS2 and Thames Water. Heathrow Airport is currently the most expensive airport in the world for airlines and passengers. The estimated budget for the Heathrow West project is below £25bn, significantly lower than the £49bn estimated by Heathrow Airport Limited (HAL).

The shorter runway, at 2,800m, is 700m shorter than the design proposed by the incumbent operator, Heathrow Airport Limited (HAL), and is a major point of contention between the two bids. The genesis of Arora's bid can be traced back over a decade, with him having pursued the idea since then.

The outcome of this bid could mark a significant shift in the management of Heathrow Airport, potentially leading to more efficient operations and lower costs for airlines and passengers. The decision is expected to be made in the coming months.