Civil Aviation Authority confirms final decision on early Heathrow expansion costs

The UK Civil Aviation Authority (CAA) has today published its final decision on the regulatory treatment of early costs incurred by potential promoters of expansion at Heathrow airport.

Early costs include planning and design costs which are needed to develop a credible expansion scheme at Heathrow, including preparation of material to support a future Development Consent Order application.

The decision allows Heathrow Airport Limited (HAL) to recover early expansion costs incurred during 2025 and 2026 through airport charges, subject to a cap of £320 million (2024 prices) and a range of safeguards designed to protect consumers including:

• Independent expert assurance of expenditure.
• Ongoing transparency and cost reporting requirements.
• An ex post efficiency review of costs, which will include consideration of whether HAL has taken all reasonable steps to avoid the duplication of costs
• Reopener provisions if circumstances materially change.

The Civil Aviation Authority will also allow Heathrow West Limited (HWL) to recover approximately £4.14 million of incurred costs relating to its expansion proposal up to November 2025 when the UK Government announced Heathrow Airport Limited as its preferred scheme to expand capacity at the airport. This is consistent with the regulator’s statutory duty to, where appropriate, promote competition in the provision of airport operation services.

Allowing the recovery of early costs incurred by both Heathrow in 2025 and 2026 and by Heathrow West in 2025 will increase the maximum charge per passenger using the airport by around 15p in 2028.  This will increase to an estimated 30p in subsequent years.  The final impact on charges will be determined as part of the Heathrow H8 price control review.

Tim Johnson, the UK Civil Aviation Authority’s Director of Consumers and Markets 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. The costs Heathrow can recover are capped, independently scrutinised and subject to efficiency reviews, helping ensure that passengers only pay for efficient costs that are justified.”

Today’s final decision relates only to early costs incurred to the end of 2026 by Heathrow Airport Ltd and by Heathrow West Ltd to November 2025.  The Civil Aviation Authority will consult later in 2026 on arrangements for costs incurred from 2027 onwards. This will also include consideration of costs incurred by Heathrow West in 2026 in progressing its DCO application.

The final decision includes proposed modifications to Heathrow Airport Limited’s licence and is intended to support timely progress on expansion while ensuring that only efficient and justified costs are passed onto consumers.

Notes to Editors

• Today’s final decision on the recovery of early costs during Heathrow capacity expansion follows previous consultations published by the UK Civil Aviation Authority in August 2025, December 2025 and March 2026, as well as an update issued in September 2025.
• A link to today’s publication and previous consultations can be found on the Civil Aviation Authority’s website: www.caa.co.uk/CAP3289
• Both Heathrow Airports Limited and airlines operating at Heathrow airport have six weeks to decide whether to lodge an appeal to the Competition and Markets Authority in relation to this decision.