Heathrow passengers will face higher fares for decades after the aviation regulator gave the airport permission to recoup £320m spent on early planning of its third runway. The Civil Aviation Authority (CAA) said the money would be recovered through higher airline charges, typically passed on to travellers, over 20 to 25 years. This is expected to add 15p to ticket prices in 2028, rising to 30p in later years.
British Airways, the largest airline at Heathrow, had argued against the early cost recovery, warning it would risk making expansion “unaffordable for consumers and inconsistent with a credible benefits case”, according to a CAA document. Airlines have repeatedly complained that Heathrow already has the highest charges of any airport in the world.
“Heathrow allowed to recover £320m in expansion costs, adding up to 30p to ticket prices over decades.”
The CAA’s director of consumers and markets, Tim Johnson, said the 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”. He added that the costs were “capped, independently scrutinised and subject to efficiency reviews”.
A Heathrow spokesperson said: “This project is about making travel more affordable and giving passengers more choice, while providing a real economic boost to every region and nation of the country.” The airport will also collect £4.1m in costs incurred by a rival scheme, Heathrow West, led by property billionaire Surinder Arora, up to 25 November last year, when the government announced it preferred Heathrow’s own £33bn proposal.
In November, the Department for Transport said Heathrow’s plan offered the “greatest likelihood” of getting planning approval within this parliament. Last month the government launched a consultation on its Heathrow expansion national policy statement, setting out conditions needed for the project. The then chancellor, Rachel Reeves, said she was determined to get “spades in the ground” for the third runway during this parliament, aiming for completion by 2035.
A separate process will determine arrangements for costs incurred from 2027. The CAA’s Johnson said safeguards included transparency and cost reporting requirements, and assurance by independent experts. How much the actual construction will add to ticket prices remains unclear, but the early recovery alone will leave passengers paying more for years to come.