Question to the Department for Transport:

To ask the Secretary of State for Transport, what assessment he has made of the effect of potential changes to the investment grade credit rating of Heathrow Airport on the (a) airport’s expansion plans and (b) provisions of the Aviation National Policy Statement.

The Government is clear that the Northwest Runway scheme will be financed in its entirety by the private sector. As a private company, decisions that could impact its credit rating are a matter for Heathrow Airport Limited (HAL) and its investors.

The Civil Aviation Authority (CAA), as the independent economic regulator, has a duty to ensure that HAL can finance its airport operations. In its CAP1832 working paper on financial resilience and ring-fencing, published in August 2019, the CAA considered that the potential for a regulatory obligation on HAL to maintain an investment grade credit rating was worthy of further exploration. Comments from stakeholders are invited by 11 October 2019 ahead of a further working paper on the matter.

The Government, with our independent expert advisers, and the CAA have conducted assurance work on the finance and affordability of HAL’s expansions proposals. This work has concluded that, so far as can be assessed at this stage of the process, and assuming current market conditions, HAL is in principle able to privately finance expansion without government support.