The UK Civil Aviation Authority has approved the recovery of capped early Heathrow expansion costs while introducing safeguards to protect passengers.
The UK Civil Aviation Authority (CAA) has confirmed its final decision on the regulatory treatment of early costs associated with the proposed expansion of London Heathrow Airport (LHR), allowing certain development costs to be recovered through future airport charges.
The decision covers planning, design and preparatory work undertaken to develop Heathrow Airport Limited’s expansion proposal, including activities required to support a future Development Consent Order application.
Under the framework, Heathrow Airport Limited will be permitted to recover eligible costs incurred during 2025 and 2026 through airport charges, subject to a cap of £320 million at 2024 prices. The regulator said the arrangement includes several safeguards to protect consumers, including independent scrutiny of expenditure, ongoing transparency requirements, efficiency reviews and provisions to reassess the framework should circumstances change.
CAA introduces safeguards for cost recovery
The regulator also approved the recovery of approximately £4.14 million by Heathrow West Limited for costs incurred before November 2025 while developing its competing expansion proposal. The CAA said this reflected its statutory duty to promote competition where appropriate.
According to the regulator, recovering these early costs is expected to increase the maximum airport charge by around 15 pence per passenger in 2028, rising to an estimated 30 pence in subsequent years. The final impact will be determined through Heathrow’s H8 price control review.
Tim Johnson, Director of Consumers and Markets at the UK Civil Aviation Authority, 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.”
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