Heathrow Airport Expansion Funding Cap Triggers Passenger Fare Increases

The UK Civil Aviation Authority (CAA) has placed a cap on early‑stage funding for the Heathrow Airport third‑runway expansion, aiming to limit financial risk for airlines and consumers. The regulator’s limit applies to pre‑construction expenditures such as planning, land acquisition and design work, raising concerns that tighter liquidity could slow progress and extend the overall timeline.

In a related decision, the CAA approved Heathrow Airport Limited (HAL) to recover £320 million of early costs by raising the airport charge per passenger. The increase is expected to add about 15 pence to fares in 2028, rising to around 30 pence in later years, and will be spread over 20‑25 years. British Airways warned that the early cost recovery could make the expansion unaffordable for consumers. The combined regulatory actions affect the project's financing, investor confidence and passenger pricing for the busiest UK airport.