Gulf-backed Heathrow announces $3bn investment plan

Heathrow Airport

• Improvements for all terminals
• More punctual departures
• New baggage systems

Heathrow Airport in London – now partly owned by two Gulf sovereign wealth funds: Saudi Arabia’s Public Investment Fund (PIF) and the Qatar Investment Authority – has announced a £2.3 billion ($2.9 billion) investment plan to upgrade the transport hub over the next two years. 

The investment will be used to introduce new baggage systems, resurface a runway and pay for the full rollout of higher-specification security scanners.

Heathrow also plans to improve all terminals and implement projects that will aim to deliver more punctual departures and arrivals at what the aviation data provider OAG says is the “world’s most connected airport”. 

Heathrow said the spending plan, the largest private sector capital investment in UK transport infrastructure, is an increase of £244 million on previously forecast investments. 

The airport said £1.05 billion will be spent on infrastructure in 2025, and another £1.29 billion will be invested in 2026. 

The announcement of the uggrade investment came days after Saudi Arabia’s Public Investment Fund (PIF) acquired a 15 percent stake in FGP TopCo, the holding company of Heathrow Airport Holdings.

The stake was purchased from the Spanish infrastructure giant Ferrovial and other FGP TopCo shareholders.

• PIF acquires 15% stake in London’s Heathrow airport

• Mubadala weighs buying stake in Heathrow airport

• PIF ‘interested in Newcastle Airport stake’

Ardian, a Paris-headquartered private equity fund, also bought 22.6 percent of FGP TopCo from the same shareholders through a separate vehicle.

Rachel Reeves, Britain’s chancellor of the exchequer, said the deal was “a strong vote of confidence in the UK”. 

Qatar Investment Authority already holds 20 percent of Heathrow. Other investors are Caisse de dépôt et placement du Québec, Singapore’s GIC sovereign fund and the Australian Retirement Trust, each with stakes below 13 percent.

Heathrow is the fourth busiest airport in the world, after Dubai, Atlanta and Tokyo.

It expects to see a record number of passengers this December, with an increase of 21 percent predicted on Christmas Day compared to last year. Heathrow said it was on target to have 25 routes each hit a million passengers this year, up from 24 last year.