A multi-billion dollar phased investment will begin this year at London Heathrow Airport (LHR)—Europe’s busiest gateway—marking the launch of the hub’s largest investment program ever, and 100% privately funded. It has been described as a “once-in-a-generation” project.  

The plans build on a GBP2.3 billion (USD2.9 billion) accelerated investment program announced by Heathrow in December across multiple projects over the next two years. 

Today (Wednesday), Heathrow CEO Thomas Woldbye visited a British Steel plant to announce the project and confirm the airport will present proposals for a third runway to share with the British government by summer. The Chancellor, Rachel Reeves, has already endorsed the idea of a third runway to inject some growth into Britain’s sleepy economy.

Woldbye said: “This privately funded program will upgrade existing infrastructure while laying the groundwork for a third runway, boosting UK investment and economic growth, with tangible benefits felt this year.

“As part of a phased expansion, and with the government’s clear backing, I am today confirming multi-billion-pound investment plans, 100% privately funded, to upgrade our terminal buildings, enhance the passenger experience, and improve resilience and sustainability. This is a vital investment and will ensure Heathrow remains globally competitive.”   

The program has four components:

• Terminal infrastructure: LHR will work with airlines and the regulator to finalize plans for capacity increases at Terminals 2 and 5  
• Customer experience and punctuality: By reconfiguring the layout of the airfield and increasing the number of aircraft stands to improve resilience and punctuality 
• Local transport: New plans to improve bus and coach connections to provide more travel options
• Sustainability: All major new infrastructure will have enhanced environmental credentials and will use more sustainable sources of power.  

Terminal expansion is considered necessary because of growing traffic. In 2024, LHR carried 83.9 million passengers, a new record—and three million more than the previous record set in 2019.

Making Promises to British Industry

LHR has also committed to using a UK-wide supply chain to help deliver the UK government’s mission on economic growth, including using British steel on projects. These will start this year within the airport’s existing boundary and work towards an eventual third runway. 

Industry Minister Sarah Jones said: “This investment is the latest in a long line of wins which our Plan for Change has helped deliver. It supports thousands of jobs and marks a major vote of confidence in our home-grown steel sector and this government’s industrial strategy. By signing the Steel Charter, Heathrow will give a huge boost to UK steel-making communities and help us kickstart economic growth.” 

A third runway is still many years away and will see multiple challenges from environmental organizations and possibly London’s Mayor, Sadiq Khan, along the way. According to a study from Frontier Economics, a third runway could increase UK GDP by 0.43% by 2050. Some 60% of that boost, would go to areas outside London and the south-east of England.

The project, at Britain’s only hub airport, is supported by many business organizations and other UK gateway including Newcastle and Cornwall-Newquay, but also has very vocal detractors. Woldbye said: “This project can only go ahead if we meet the rules on noise, air quality and carbon that the government sets out in the Airports National Policy Statement – it’s as simple as that. Even though we’re serving more passengers than ever before, our noise footprint is smaller.”  

According to a report from LHR, investments in the airport in 2024 reached GBP1.1 billion (USD1.4 billion), benefiting over 1,100 supply chain partners in the UK.