The UK Civil Aviation Authority (CAA) has published a draft decision setting out how early costs linked to potential expansion at Heathrow Airport may be treated under economic regulation.
The proposals, which are now open to statutory consultation, indicate that Heathrow Airport Limited would be permitted to recover certain early-stage expenditure incurred during 2025 and 2026. The regulator has proposed a cap of 320 million GBP on the amount that could be recovered from airport users.
These costs are typically recovered through airport charges, which can indirectly affect airlines and passengers
According to the draft, these early costs relate primarily to planning and design activity. This includes work required to develop a detailed and credible expansion scheme, such as technical studies and the preparation of material to support a future application for a Development Consent Order.
The draft decision also addresses costs incurred by Heathrow West Ltd. The regulator proposes that up to 4.3 million GBP of expenditure incurred by the company up to 25 November 2025 could be recovered. This date corresponds with the UK Government’s announcement identifying Heathrow Airport Limited’s scheme as its preferred option for expanding capacity.
In addition to the cost cap, the regulator’s proposals also outline strong consumer protections, including the appointment of an independent technical expert to provide ongoing monitoring and assurance, requirements for the transparent reporting of costs, reopener mechanisms in the case of a change of circumstances, and a further efficiency review of the aforementioned costs.
The regulator will publish its final decision on early costs recovery and a statutory notice on the necessary modifications to Heathrow Airport Limited’s Licence this summer.
