Heathrow pays shareholders more than it invests in the last four years

Heathrow pays £3.1bn of dividends to investors in the last 4 years, more than it invested in the airport

Heathrow Airport has paid £3.1bn of dividends to investors in the last four years, raising questions about why it should be allowed potentially to double passenger fees to fund the construction of its expensive 3rd Runway scheme.

According to analysis by Heathrow Hub, an independent campaign to extend the existing northern runway instead of pursuing the 3rd Runway, Heathrow Airport’s dividends have exceeded its capital expenditure of £2.9 billion during the period.

Heathrow Airport has taken more money out of Heathrow than it has invested. Furthermore, as a private company with a complex, opaque corporate structure owned largely by overseas entities, it does not fully disclose where Heathrow Airport Ltd’s dividends end up. For reasons which are not clear, it claims half of its dividends go to its debt investors “as payments on principal and interest.”

An extended northern runway would be substantially cheaper, simpler and quieter than the 3rd Runway, with the first phase costing just £3.8bn, a fraction of the price tag for the 3rd Runway, and with no impact on passenger charges.

Heathrow vetoed the cheaper, simpler, quieter extended runway in 2016. Having reviewed the extended runway option at the request of Transport Secretary Chris Grayling, the airport declined to implement it. The current regulatory regime effectively incentivises Heathrow to build a more expensive scheme by approving higher passenger charges, leading to higher dividends.

A spokesman for Heathrow Hub said: “Heathrow should be required to explore all avenues for reducing cost before being allowed to raise passenger fees again.

“It is wrong that the airport has been allowed to veto our cheaper, simpler, quieter extended runway by refusing to implement it. Passengers and airlines will have to pay more as a consequence.

“Instead of concentrating on paying its investors ever higher dividends, Heathrow Airport should reassure passengers that it is acting in their best interests by controlling costs.

“We have asked the Transport Select Committee of the House of Commons to include our cheaper, simpler, quieter extended runway as an option for expansion. It is critical to hold the airport’s feet to the fire to protect UK consumers from Heathrow’s shareholders’ interests.”