The UK aviation regulator, the Civil Aviation Authority (CAA), has rejected Heathrow's plans to significantly raise landing fees and will consult on capping the average charge per passenger for 2027-2031 at between £27.20 and £30.50, according to multiple reports. The mid-point of the proposed cap is £28.80, 1% above the current £28.40, while Heathrow had proposed an average charge of £34.20. Airlines have proposed a charge of £23.00. The CAA is also proposing to allow Heathrow two-thirds of its suggested £9.5bn capital expenditure programme. The regulator's proposals set incentives for Heathrow to improve service levels and environmental performance. The CAA will publish final proposals in November, with a decision in April 2027. IATA chief Willie Walsh demanded a 'full reset' of Heathrow regulation, saying the current model concentrates too much control in a single operator with weak cost discipline. Heathrow is considered Europe's most expensive airport, according to multiple reports. Initial estimates suggest the third runway will cost over £25 per passenger, more than doubling the total fee to over £50. Airlines pass much of Heathrow's fees onto customers via plane fares.
Heathrow is owned by a consortium led by Ardian and includes sovereign wealth funds of Qatar, Singapore, and Saudi Arabia. China Investment Corporation, which owns 10% of Heathrow, is reportedly considering selling its stake due to rising costs, according to the Financial Times. Heathrow's debt rose to £17.6bn in 2025, up from £16.6bn, while passenger numbers grew by 600,000. The No 3rd Runway Coalition said rising debt raises questions over the project's viability. A Heathrow spokesperson said the airport remains well funded with an investment-grade credit rating and liquidity of £2.9bn. The CAA allowed Heathrow to recover up to £320 million of early expansion costs incurred in 2025-2026, and Heathrow West Ltd to recover up to £4.3 million of early costs incurred up to November 25.
What is needed is a full reset. The current model for Heathrow concentrates too much control in the hands of a single operator, with insufficient competitive tension and weak cost discipline.
The CAA has shortlisted four options for Heathrow expansion, including an alternative developer model consistent with Arora Group's Heathrow West proposal. Heathrow Airport Limited wants to deliver the expansion itself, arguing a single body is more efficient. Arora Group's proposal includes a 2,800-metre runway that would not require moving the M25, while Transport Secretary Heidi Alexander preferred a full-length 3,500-metre runway. The expansion would increase capacity to 756,000 flights and 150 million passengers per year. According to The Guardian - Business, a source familiar with talks described that all airlines and stakeholders agree on the necessity of a third runway but differ on cost and delivery.
Menzies Aviation and Swissport have joined the Heathrow Reimagined campaign. Miguel Gomez Sjunnesson of Menzies Aviation said Heathrow's cost structure and reliability lag behind international peers. According to City AM, Warwick Brady of Swissport warned that getting the expansion wrong risks entrenching a structural disadvantage for the UK. Heathrow says it has a plan to achieve net zero carbon emissions by 2050. IAG CEO Luis Gallego said the cost of the third runway must be capped at £30bn. British Airways dominates Heathrow with more than 50% of slots. Heathrow's new chairman Philip Jansen has held talks with airlines and Surinder Arora to defuse a row over the third runway, according to The Guardian - Business. Ministers backed a plan for the runway to be operational by 2035.
We know that cost effective infrastructure investment will bring clear benefits to the UK aviation industry and wider economy. Yet, Heathrow’s cost structure, service and operational reliability are outliers when compared to our experience at other international hubs.
Regulatory reform and the introduction of competitive cost structures is required to ensure that businesses and passengers are able to see the economic benefits from increased expansion. It is a pivotal moment for Britain’s future, and we look forward to working with the campaign to secure regulatory reform and deliver better outcomes for customers.