Heathrow invests GBP10 billion; Ardian acquires 33% equity; but should it be UK’s only hub airport?

Within the past week or so two key events took place involving London Heathrow Airport.

Firstly, it announced a GBP10 billion investment programme over the next four years - one that will be partly paid for by a hike in landing and other charges.

Secondly, the now majority shareholder Ardian announced the acquisition of another slug of the equity, taking it to almost 33% and putting it as firmly in charge, as was Ferrovial when Heathrow was privatised and stock market delisted in 2006.

Incidentally, that Ardian transaction also kisses goodbye to Ferrovial, to the Canadian pension fund CDPQ (which was also a 'founder investor'), and to the British Universities Superannuation Scheme fund.

But possibly the most interesting comment came from Virgin Atlantic, which complained vociferously - and not for the first time - about Heathrow's expense and 'monopoly power'.

One way of countering that power would be by having another national level hub airport in the UK; it isn't as if comparable countries elsewhere in Europe don't do that.

Successive British governments have tried, and manifestly failed, to establish an economic 'Northern Powerhouse' in the UK to switch attention away from the capital. Now the entire notion has gone to sleep, where it will probably stay for another 20 years.

Nominating a second UK global aviation hub and encouraging airlines to use it would be the best way of awakening a sleeping giant (the north and its engineering, textiles, and associated industries used to be the bread and butter in the UK; not in the south).

This report delves into the 'whys and wherefores' of such a decision, and nominates Manchester as the logical choice.