The Civil Aviation Authority (CAA) has approved the recovery of up to £320 million spent by Heathrow Airport Limited (HAL) on planning and design work since the start of 2025. The money will be collected through higher charges paid by airlines, which are usually passed on to passengers through ticket prices.
The decision concerns only the early stages of the expansion plan. The full cost of constructing the runway has not yet been included in passenger charges. According to the CAA, the approved recovery process is designed to allow progress on the project while limiting the costs transferred to travellers.
CAA Approves Recovery of Early Runway Planning Costs
The regulator said Heathrow Airport Limited can recover spending linked to preparing its expansion proposal, including planning documents and material required for a future development consent order (DCO) application. DCOs provide approval for major infrastructure projects in the UK.
According to the CAA, the decision will increase the maximum airport charge per passenger by around 15 pence in 2028, with the figure expected to reach an estimated 30 pence in later years. The recovery period is expected to last between 20 and 25 years. A separate review will determine how costs incurred from 2027 onwards will be treated.
The regulator also approved the recovery of £4.1 million spent by Heathrow West, a competing expansion proposal led by property entrepreneur Surinder Arora, covering expenditure up to 25 November, when the government announced that HAL’s proposal was its preferred option.
Tim Johnson, the CAA’s director of consumers and markets, said the decision aimed to balance support for Heathrow expansion with protection against unjustified costs. According to Johnson, the costs allowed for recovery would be capped, independently reviewed and subject to efficiency checks.
Airlines Raise Concerns over Heathrow Expansion Costs
The decision comes after repeated concerns from airlines about the cost of operating at Heathrow, which carriers have described as one of the most expensive airport hubs in the world.
British Airways, Heathrow’s largest airline operator, previously warned that allowing early cost recovery could make the expansion project unaffordable for passengers and weaken the argument for its benefits, according to a CAA document.
The government selected Heathrow’s proposal over the alternative Heathrow West plan in November. The airport’s scheme is estimated to cost £33 billion, including £1.5 billion for relocating part of the M25 motorway, and is expected to be privately financed.
The project would increase Heathrow’s annual capacity to 756,000 flights and 150 million passengers, if approved and completed. The government launched a consultation on its Heathrow expansion national policy statement last month, setting out the conditions required before the project can move forward. Former chancellor Rachel Reeves said she wanted construction work on the third runway to begin during the current parliamentary period and aimed for completion by 2035.
The proposal has faced opposition from climate campaigners, local residents and some politicians over concerns about environmental impacts and infrastructure priorities. Prime Minister Andy Burnham has previously argued that the expansion could redirect investment away from regions outside London.
A Heathrow spokesperson said the project would provide passengers with more choice and support economic activity across the UK. The airport said it was reviewing the CAA’s proposals before making further investment decisions.
