BAA Drops Plans For New Heathrow, Stansted Runways

May 25, 2010

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British airports operator BAA, owned by Spanish builder Ferrovial, has dropped plans to build new runways at London's Heathrow and Stansted airports, citing changes to government airports policy.

Britain's new ruling Conservative-Liberal Democrat coalition said it would block additional runways at Stansted and Gatwick as well as cancelling plans for a third runway at Heathrow as part of a programme for a low-carbon economy.

BAA owns Heathrow, Britain's biggest airport, as well as Stansted, its third-largest. It sold Gatwick, which also serves London, late last year.

"We recognise the importance of government policy in a matter as significant and controversial as runway capacity," BAA chief executive Colin Matthews said in a statement.

BAA had already spent GBP£190 million (USD$273 million) on the Stansted project. Heathrow airport declined to say how much it had spent.

The government gave the go-ahead in January last year for a third runway and another terminal at congested Heathrow airport as part of GBP£9 billion (USD$13 billion) expansion the then Labour leadership said was crucial to Britain's prosperity.

But the project ran into fierce opposition and a legal challenge from local residents and environmentalists concerned about noise and increased carbon emissions.

"BAA has finally come to terms with reality and recognised what everyone else has known for months. New runways at Heathrow and Stansted... never made sense on economic or environmental grounds," environmental group Greenpeace said in a statement.

Stansted had previously said new runway capacity was urgently required if the UK was to preserve its global economic competitiveness.

In a separate development, Bristol Airport in western England said its local authority had approved an expansion that would allow it to almost double the number of passengers it handles.

(Reuters)