Newcastle Football Club, the Independent newspaper, Rocco Forte Hotels, Selfridges, Aston Martin cars and now Heathrow Airport. Saudi Arabia is investing tens of billions of pounds in Britain and plans to invest tens of billions of pounds more. A consortium backed by the Public Investment Fund (PIF), Riyadh's sovereign wealth fund, is buying the 25 percent stake in Europe's busiest hub airport currently owned by Spanish infrastructure giant Ferrovial for £2.4 billion with private investment company Ardian.
It could increase its stake even further, giving the consortium majority control. The deal is expected to be completed before the summer. The PIF says it wants to be a "long-term partner" for the airport.
How will new money - and new Gulf thinking - transform Heathrow?
The big question for passengers, airlines and people living in West London is that of the third runway. Many airlines and politicians are pushing for the £14 billion development to increase passenger capacity to 142 million a year - almost doubling the record 81 million reached in 2019. It was passed in 2003, but the coalition government led by David Cameron withdrew support in 2015 after an outcry from green campaigners. Theresa May's government reversed that decision in 2018.
Two years later, the Court of Appeal ruled that a third runway would be incompatible with the UK's climate commitments. That decision was overturned by the Supreme Court later that year. Before leaving his role as Heathrow chief executive last year, John Holland-Kaye said he was investigating "what it would take to restart the planning process".
"The airport deserves a third runway," says aviation analyst Henry Harteveldt of Atmosphere Research. "Now that the legal situation has been resolved, I hope that progress will finally be made."
But it seems that new Saudi billions will not be poured on new asphalt. The Sunday times recently reported that the third runway has been shelved. Heathrow executives are said to believe that not only will environmental opposition make obtaining planning permission too difficult, but also that disruption to road traffic, especially on the M25 during the construction process, would be politically unacceptable.
The story continues
Heathrow's new CEO, Thomas Woldbye, has publicly denied that the third runway project is off the table, but is said to be looking for new ways to squeeze up to 20 million extra passengers through the airport each year by 2036 without new tarmac. Heathrow desperately needs more flights and more passengers. It only offers direct connections to 214 destinations - compared to 330 for Frankfurt, 328 for Paris Charles de Gaulle and 272 for Amsterdam's Schiphol - and has lost its crown as the world's busiest international hub to Dubai.
But how can it attract more? New, better located terminals and gates would help the country handle more planes and more passengers faster. There is no Terminal 1; it closed ten years ago. It could be rebuilt to create space for T2, Heathrow's oldest terminal, only to be demolished and rebuilt into a new home worthy of Virgin Atlantic, Emirates and Qantas, the major airlines. Terminals 1, 2 and 3 could provide a central hub for all airlines except BA, which would remain in terminal 5.
Terminal 4 could be closed, which would also improve efficiency. T4 is in the wrong place - on the other side of one of the runways, rather than between them, like all other terminals, meaning that departing and arriving aircraft often have to cross a 'real' runway , which causes delays.
Surinder Arora, the founder and chairman of the Arora Group, one of Britain's largest private hotel owners, wants to introduce terminal competition at Heathrow by building a new terminal on land between T5 and the M25 motorway. It could be a new T4.
Some analysts say Heathrow should adopt a 'mixed mode' - using the same strip of tarmac for take-off and landing at the same time, which happens at single-runway airports such as Gatwick. To minimize noise pollution for local residents, Heathrow alternates between runways, using one for take-off for a few hours and then switching to landing and vice versa. Using mixed mode could increase the number of takeoffs and landings by about 30 percent, analysts say. New air traffic control systems, which reduce the time gaps between take-off and landing, would further increase the number of flights.
It is unlikely that such changes will be implemented in the short term. Reforms in the use of airports may require action from parliament, and financial analysts say rising costs mean there is little appetite for new construction work. A new T1 and a new T3 would cost around £10 billion. Then technology remains the most important way to improve efficiency. This is where the new Gulf investors have an advantage.
Because all the new airports in the Gulf are so new, they are at the forefront of cutting-edge technology. I was one of the first passengers to fly to and from Abu Dhabi's new airport after it opened last year, and it holds clues to what Heathrow could look like.
There are only check-in machines and desks for 'shared use'. Departing passengers can use one of hundreds of automated machines and baggage drop terminals for all 29 airlines they serve. Old-fashioned paper luggage tags are being replaced by computer chips or QR codes linked to passenger booking information. All this makes it much faster to check in and reach passport control, which is the fastest in the world because it uses facial recognition. You do not need to show your passport. Boarding is also faster, because facial recognition is also used at the gate.
These innovations will be incorporated into the new terminals to be built at Riyadh's King Khalid Airport as the kingdom's de facto ruler, Mohammed bin Salman, transforms it into a five-lane hub to house national carrier Saudia and a to make a new start. airline Riyadh Air. Saudi airport operators are also experimenting with X-ray security arches that passengers can easily walk through with their luggage, without having to put their bags on a conveyor belt and through a scanner.
One change at Heathrow will likely be low-tech. The airport may only have two runways, but it is a vast area of five square kilometers. There is plenty of room to park jets on remote stands and bus passengers near the steps. Passengers will hate it, but if it means more flights and fewer delays, they might come to accept it. Especially if they have to go to Saudi Arabia. The Saudi investment is likely to make it easier for the new Riyadh Air to secure coveted slots.
