Stansted runway facing long delay

Construction of a second runway at Stansted will be delayed by several years if the £4bn project has to be financed entirely by passengers using the Essex airport, BAA warned yesterday.

Construction of a second runway at Stansted will be delayed by several years if the £4bn project has to be financed entirely by passengers using the Essex airport, BAA warned yesterday.

The airport operator said the timetable for opening the runway had already slipped by more than a year. The Government gave the go-ahead last year for a second runway to open in 2011-12, but BAA said yesterday it would not be ready until 2013 at the earliest, even if part of the cost was met by higher charges on passengers at Heathrow and Gatwick. If the runway had to be funded on a stand-alone basis, then completion of it would be delayed by "several years" beyond that date, BAA said.

This raises the possibility of a third runway being built at Heathrow before a second opens at Stansted. A White Paper last year said Heathrow's third could be built between 2015 and 2020 if local air quality standards were met.

BAA said the 18-month delay the second Stansted runway already faced was due to the Government's slowness in planning new road and rail links.

For the runway to open in 2013, airport charges would have to rise to between £7 and £8 at Stansted, while Heathrow and Gatwick passengers would have to pay an extra 50p to £1. If the runway were to be self-financing, Stansted charges would have to rise to up to £11 per passenger; the current rate is £3, which is included in airlines' ticket prices.

They reacted furiously to BAA's proposals, setting the scene for a bitter legal battle. British Airways and Virgin Atlantic said they were totally opposed to the second runway at Stansted being part-financed by passengers at other airports. Virgin said:"This is totally outrageous and we will fight tooth and nail."

Ryanair and easyJet, the two biggest operators at Stansted, accused BAA of dropping a "bombshell" on them by proposing to raise airport charges by almost 300 per cent "just to finance another BAA Taj Mahal". The two low-cost carriers demanded that BAA return to the drawing board and produce a scheme for Stansted for which its customers were prepared to pay.

Under the current regulatory regime, enforced by the Civil Aviation Authority, any expansion at Heathrow, Gatwick or Stansted must be financed by the passengers who use it. BAA said, however, that there was an argument for reverting to a "system" approach to financing the runway on the ground of the wider economic benefits that it would generate in the South-east.

Mike Clasper, BAA's chief executive, said the earlier that an additional runway was built at Stansted, the greater the capacity and the more the competition between airlines, driving down fares and benefiting the economy generally.

He rejected claims that BAA was proposing to "gold-plate" the new runway or build another "Taj Mahal" at Stansted, and also denied that by airing the possibility of cross- subsidisation BAA was effectively starting the campaign to change the regulator's mind.

Mr Clasper said the development would be in two stages. The first, costing £2bn, would provide for an extra 15 million passengers a year and would involve the runway itself, a new terminal, check-in facilities, aircraft stands, piers and taxiways, and road and rail links.

In the second phase, costing a further £2bn, BAA would add more stands and piers and further rail and road access, increasing the capacity of the second runway to 30 million and Stansted's overall capacity to 70 million by 2030.