29th Jul 2026 09:14
(Alliance News) - Heathrow passengers face decades of higher fares, after the west London airport was given permission to recover early costs from developing its expansion plan.
UK regulator the Civil Aviation Authority on Wednesday said it has permitted Heathrow Airport Ltd to recoup GBP320 million spent since the start of last year on its proposal to build a third runway.
It will recover the money through higher airline charges, which are typically passed on to passengers in air fares, for about 20-25 years.
Heathrow West, a rival expansion scheme led by property billionaire Surinder Arora, has been given the go-ahead to recoup GBP4.1 million it spent on its plan in 2025 up to November 25, when the UK government announced Heathrow Airport's proposal was its preferred option.
The CAA said its decision will increase the maximum airport charger per passenger by about 15p in 2028, rising to an estimated 30p in subsequent years.
British Airways, the largest airline at Heathrow, warned that early cost recovery by Heathrow Airport would create a risk that expansion will be "unaffordable for consumers and inconsistent with a credible benefits case", according to a CAA document.
Shares in BA-owner International Consolidated Airlines Group SA were down 1.7% to 438.20 pence in London early Wednesday.
Airlines have repeatedly complained that Heathrow has the highest charges of any airport in the world.
The money that can be recovered includes the planning and design costs necessary to develop a credible expansion proposal, including preparing material to support a future development consent order application.
DCOs grant permission for major infrastructure projects to go-ahead.
Tim Johnson, the CAA's director of consumers and markets, said: "Our decision strikes a balance between supporting the delivery of benefits to consumers through timely progress on Heathrow expansion, whilst also protecting them from undue increases in costs.
"The costs Heathrow can recover are capped, independently scrutinised and subject to efficiency reviews, helping ensure that passengers only pay for efficient costs that are justified."
A separate process will be conducted to decide arrangements for costs incurred from 2027.
Last month, the UK government launched a consultation on its Heathrow expansion national policy statement, setting out the conditions needed if the project is to be given the go-ahead.
Former chancellor Rachel Reeves said she was determined to get "spades in the ground" for the third runway in the current Parliament, and for it to be built by 2035.
Prime Minister Andy Burnham, who sacked Reeves, has previously expressed concerns over Heathrow expansion, stating the plans divert infrastructure investment "away from the North and traps it in London".
Heathrow Airport's scheme is estimated to cost GBP33 billion, including GBP1.5 billion to move the M25, and is expected to be fully privately financed.
It would see Heathrow's annual capacity increase to 756,000 flights and 150 million passengers.
A Heathrow spokesperson said the project will give passengers more choice while providing a "real economic boost to every region and nation of the country".
He went on: "We have been clear from the start that unlocking the private investment that will deliver these benefits requires a supportive regulatory framework.
"We are carefully considering the CAA proposals and will make investment decisions accordingly."
By Neil Lancefield, Press Association Transport Correspondent
source: PA
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