The aviation regulator has ruled that costs associated with Heathrow Airport’s third runway can be passed directly to passengers, approving a draft decision that allows the airport to recoup up to £320 million (in 2024 prices) through higher charges to airlines, costs that will ultimately filter through to ticket prices.
The Civil Aviation Authority (CAA) published its draft decision on 29 July 2026. The cap covers early planning and design expenditure incurred during 2025 and 2026, and the regulator states it will raise the maximum airport charge per passenger by around 15 pence in 2028, rising to an estimated 30 pence in subsequent years.
This is a meaningful moment in how infrastructure risk gets priced in British aviation. Passengers are being asked to underwrite speculative costs before a single spade of earth has been turned, and the scale of those costs deserves scrutiny.
The Airline Community’s Concerns About the Cost Proposals
The airline community raised the alarm about Heathrow’s cost proposals as far back as September 2025. In a formal response to the CAA’s consultation, the airlines pointed to the stark disparity between Heathrow Airport Limited’s proposed early costs of £320 million for 2025 and 2026 and Arora Group’s proposed costs of £3.5 million to £4 million for the same period, as recorded in the CAA’s published airline community response to CAP3149. The airlines argued the scale of Heathrow’s ask was not adequately explained.
That comparison is worth considering closely. Two competing proposals, both covering early-stage runway planning. One costs roughly 80 to 90 times the other. The CAA has now decided that the larger figure, subject to consultation, can be recovered from passengers.
Heathrow West Ltd, Arora Group’s rival design vehicle proposing a shorter runway, will also be permitted to recover costs, though the figure here is considerably smaller. The CAA’s draft decision puts the Heathrow West cap at up to £4.3 million, covering expenditure up to 25 November 2025, the date the UK Government announced Heathrow Airport Limited’s proposals as its preferred scheme. A figure of £4.1 million circulated via the BBC; the CAA’s own newsroom states the cap as £4.3 million, and the regulator’s figure takes precedence.
The rationale for allowing Heathrow West to recover anything at all is rooted in the CAA’s statutory duty to promote competition in airport operation services where appropriate. A credible rival bidder incurred real costs; absorbing those entirely would deter future competition in infrastructure procurement. The logic holds, even if the absolute sum is modest.
What the Consumer Safeguards Actually Cover
The CAA has been careful to frame this as a balanced decision rather than a blank cheque. The consumer protections built into the draft decision are more substantive than standard monitoring boilerplate. They include the appointment of an independent technical expert for ongoing assurance, transparent cost reporting requirements, reopener mechanisms if circumstances change materially, and a further efficiency review of the costs themselves.
Whether those mechanisms have teeth is a separate question. The reopener clause is particularly worth watching: it signals that the CAA retains the ability to revisit the settlement if the runway project shifts significantly in scope, cost, or direction. Given that plans for a third runway at Heathrow have been politically debated since the government first backed them in 2003, that flexibility seems prudent.
Tim Johnson, the CAA’s director of consumers and markets, 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.” Airlines, which have long complained that Heathrow is the world’s most expensive hub airport, are unlikely to agree that balance has been struck.
Heathrow’s preferred £33 billion scheme was selected by the government over Arora’s alternative in November 2025. A planning decision is expected by 2029. The airport described the project, detailed further in the Heathrow expansion plans, as one that will “make travel more affordable and give passengers more choice,” which is a peculiar assertion in the same week that passengers are told their tickets will cost more to fund early planning activities.
The draft decision is now subject to statutory consultation. If the airlines use that window as aggressively as their September 2025 submission suggests they might, the CAA will face renewed pressure to itemise exactly what Heathrow spent £320 million on before it had planning permission in place.
