BA, Virgin Atlantic CEOs Support Heathrow Expansion

Britain's government unveiled plans to build a third runway at London's Heathrow airport, one of the busiest in the world, to increase its capacity.

The plans, which were open for consultation by the public on Thursday, are hotly contested by environmental organizations but were hailed by the CEOs of British Airways and Virgin Atlantic, who set aside old rivalries to support the proposal.

"It desperately needs to happen. The U.K. needs a far better air-traffic system at Heathrow," Steve Ridgway, CEO of Virgin Atlantic, told Squawk Box Europe.

Willie Walsh, CEO of BA, said Heathrow is a key piece of international infrastructure and it "needs to expand."

"It's suffering today because it's a very popular airport, but it's operating at full capacity," Walsh said while speaking next to his Virgin Atlantic rival.

Under the proposals, a third runway would be built at the airport, served by a sixth terminal with access to the road and rail network. This would enable the airport to handle around 700,000 flights a year from over 400,000 currently.

Benefits vs Pollution

One of the key arguments in favor of the plans is the economic benefits that Britain would enjoy, along with an improved service for consumers.

"The U.K. needs a vibrant economy, it needs a vibrant air-travel system and customers need choice. Everybody benefits from that," Ridgway told CNBC Europe.

The main criticisms of the plans focus on noise and air pollution, which would be increased under the changes.

The expansion wouldn't breach the European Union's air pollution limits and the government's own noise limits, government officials said.

"There are strict limitations on air quality and noise," Stephen Nelson, CEO of BAA, told CNBC's Steve Sedgwick, while conceding "There will be more over-flying of planes in West London."

"There's a huge economic advantage and social advantage to expanding this airport," added Nelson.

UK Transport Secretary Ruth Kelly said in a statement after releasing the consultation plans that Heathrow airport has operated at nearly full capacity and that relatively minor problems cause severe delays, and the plans would help maintain the airport's lead over rivals in continental Europe.

"Heathrow supports 170,000 jobs, billions of pounds of British exports and is our main gateway to the global economy," Kelly said.

"If nothing changes, Heathrow's status as a world-class airport will be gradually eroded - jobs will be lost and the economy will suffer," Kelly added.