Heathrow passengers face higher fares as airport can recover early expansion plan costs
The UK Civil Aviation Authority has allowed Heathrow to recoup £320 million spent on developing a third runway proposal, to be recovered through higher airline charges over 20-25 years, increasing passenger costs.
Passengers at Heathrow Airport are set to face higher airfares for decades after the airport received permission to recover early costs from developing its expansion plan. The Civil Aviation Authority (CAA) announced on Wednesday that it had permitted Heathrow Airport Limited (HAL) to recoup £320 million spent on its proposal for a third runway since the start of 2025. The money will be recovered through increased airline charges, which are typically passed on to passengers, over a period of approximately 20 to 25 years. Another rival proposal, Heathrow West led by billionaire Surinder Arora, was allowed to recoup £4.1 million spent in 2025 up to November 25, when the government selected HAL's plan as its preferred option. The CAA stated that its decision would raise the maximum airport charge per passenger by about 15 pence in 2028, rising to an estimated 30 pence in subsequent years. British Airways, Heathrow's largest airline, warned that allowing HAL to recover costs early risks making expansion 'unaffordable for consumers and inconsistent with a credible benefits case,' according to a CAA document. Airlines have repeatedly complained that Heathrow has the highest charges of any airport globally. Recoverable costs include planning and design for a credible expansion proposal, including materials to support a future Development Consent Order (DCO) application. Tim Johnson, CAA director of consumers and markets, said the decision balances supporting benefits of timely expansion with protecting consumers from undue cost increases. The recoverable costs are capped and independently scrutinized. A separate process will handle costs incurred from 2027. Last month, the government launched a consultation on its Heathrow expansion national policy statement. Former chancellor Rachel Reeves expressed determination to start construction of the third runway during the current parliament, aiming for completion by 2035. Andy Burnham has previously voiced concerns that Heathrow expansion diverts infrastructure investment away from the north.
