Real Estate
Home›Real Estate›REITs›Heathrow passengers to see higher fares to recover ear…
Heathrow passengers to see higher fares to recover early expansion costs
The UK Civil Aviation Authority approved Heathrow Airport Limited to recoup £320m over roughly 20 to 25 years via higher per-passenger charges starting in 2028.
Heathrow passengers are set to face higher airfares for years after the UK Civil Aviation Authority (CAA) allowed Heathrow Airport Limited (HAL) to recover early costs tied to its third-runway expansion plan. The CAA said HAL can recoup £320m spent on the proposal since the start of last year, collecting the money through higher airline charges that are typically passed through to travelers for about 20 to 25 years.
The CAA estimated the decision will increase the maximum airport charge per passenger by about 15 pence in 2028, rising to an estimated 30 pence in later years. The regulator said the recoverable amount includes planning and design costs needed to develop a credible expansion case, including material for a future development consent order (DCO) application.
British Airways, the largest airline at Heathrow, warned the early cost recovery could make expansion unaffordable for consumers and inconsistent with a credible benefits case, citing concerns in a CAA document. In remarks on the decision, Tim Johnson, the CAA director of consumers and markets, said the ruling aims to balance timely delivery of benefits with protecting passengers from undue cost increases.