Heathrow Expansion Costs to Affect Passengers

Passengers using Heathrow Airport may face increased fares for up to 25 years following a decision by the Civil Aviation Authority (CAA). The regulator has allowed Heathrow Airport Limited (HAL) to recover £320 million that was spent on developing its third runway proposal. This recovery will occur through elevated airline charges, which are typically passed on to travellers.

Impact on Air Fares

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The CAA's decision means the maximum airport charge per passenger is expected to increase by approximately 15 pence in 2028. This figure is projected to rise to around 30 pence in the years that follow, as reported by the CAA. British Airways, a major airline operating at Heathrow, has voiced concerns that this early cost recovery could make the expansion financially unviable for consumers and inconsistent with its stated benefits.

Airlines have previously voiced objections, stating that Heathrow levies the highest charges globally. The funds HAL can recover cover expenses related to planning and design necessary for a viable expansion proposal, including preparing documentation for a future Development Consent Order (DCO) application. DCOs are required for large infrastructure projects to proceed.

Rival Scheme and Future Consultations

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Heathrow West, a competing expansion scheme spearheaded by property developer Surinder Arora, has also received approval to recover £4.1 million. This sum covers costs incurred by Heathrow West from 2025 until 25 November, the date the government designated HAL's plan as its preferred option. The CAA stated that its decision aims to balance progress on the expansion with protection for consumers against excessive cost increases. Tim Johnson, the CAA's director of consumers and markets, noted that the recoverable costs are capped, independently examined, and subject to efficiency reviews to ensure passengers only bear justified and efficient expenses.

Arrangements for costs incurred from 2027 onwards will be determined through a separate process. The government has initiated a consultation on its national policy statement for Heathrow expansion, outlining the conditions necessary for the project to gain final approval. The former chancellor Rachel Reeves had expressed a commitment to commencing work on the third runway within the current parliamentary term, with a target completion date of 2035. Concerns have been raised by figures such as Andy Burnham, who has previously stated that such infrastructure investment plans could divert resources away from northern regions and concentrate them in London.