It comes after the Civil Aviation Authority (CAA) gave the green light for Heathrow Airport Limited (HAL) can recoup £320million spent on its proposal to build a third runway
Heathrow passengers will pay higher fares for decades to pay for the early costs of developing its third runway expansion plan.
The airport will be allowed to increase its airline charges, which are typically passed on to passengers in air fares, for about 20 to 25 years.
The Civil Aviation Authority (CAA) has given the green light for Heathrow Airport Limited (HAL) to recoup £320million spent on its proposal to build a third runway.
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.
Heathrow West, a rival expansion scheme led by property billionaire Surinder Arora, will also be allowed to recoup £4.1million it spent on its plan in 2025 up to November 25, when the Government announced it would use the proposal by HAL.
HAL’s scheme is estimated to cost £33billion, including £1.5billion to move the M25, and is expected to be fully privately financed. It will see Heathrow’s annual capacity increase to 756,000 flights and 150 million passengers.
The money that can be recovered includes planning and design work and the preparation of material. A separate process will decide arrangements for costs incurred from 2027.
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 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.”
British Airways, the largest airline at Heathrow, warned that early cost recovery by HAL would create a risk that expansion will be “unaffordable for consumers and inconsistent with a credible benefits case”, according to a CAA document.
