Ticket prices set to rise as Heathrow able to recover runway money
Heathrow Airport will be allowed to charge airlines more for its services in a bid to recoup money spent on the early stages of its third runway project.
The aviation regulator is allowing airlines to refund the airport up to £320 million through higher airport charges for each passenger, which will likely be added to ticket prices.
The bidder who unsuccessfully put forward Arora Group’s Heathrow West design, which included a shorter runway, will also be allowed to recover its £4.1 million cost.
The Civil Aviation Authority (CAA) and Heathrow said measures would be taken to protect consumers from unfair costs.
The cost of early planning and design in 2025 and 2026 will be compensated by adding it to the fees the airport receives per passenger.
Heathrow airport will be able to cover the costs of Heathrow West until November last year by adding them to the airport fees.
The CAA said allowing these costs to be offset would see the maximum airport charge per passenger rise by around 15p in 2028, rising to an estimated 30p in subsequent years.
In November, the government announced it preferred the airport’s proposed £33 billion plan over Arora’s alternative plan.
At the time, the Department for Transport said Heathrow’s own proposal presented the most viable option and the “greatest prospect” of gaining a decision on planning approval in this parliament.
Tim Johnson, CAA’s Director of Consumers and Markets, said today’s decision “strikes a balance between supporting the provision of benefits to consumers through timely progress on the expansion of Heathrow, while also protecting them from excessive cost increases”.
The regulator said “safeguards” designed to monitor cost efficiency would include transparency and cost reporting requirements and assurance from independent experts.
Airlines often complain that Heathrow is the world’s most expensive hub airport and have repeatedly voiced concerns that the airport’s expansion plans will worsen this situation.
