Heathrow Airport has proposed to the UK Civil Aviation Authority (CAA) will increase airport charges to fund its £10bn ($13.5bn) expansion, it said on July 11, 2025.
The average charge over the next five years will increase to around £33.26 per passenger, up from the current average of £28.46.
Heathrow said the increase would fund its expansion plans, which will increase passenger capacity to 92 million per year, or a 12% increase in capacity, as well as expand terminal space for added amenities. Cargo handling will also get a “significant lift” with freight capacity expected to increase 20%.
Both British Airways' owner International Airlines Group (IAG) and Virgin Atlantic — and have hubs at the airport — were critical of the proposed charges, with the proposed charges translating to higher customer fares. Both airlines are part of the Heathrow Reimagined campaign, which too has been vocal on the airport's investment plans.
Virgin Atlantic agreed that Heathrow needs to “dramatically improve” to better serve the British public.
“However, only Heathrow with its monopoly power as the UK's only hub airport, would think that this £10bn investment plan represents value for money and that's before any third runway expansion costs are factored into the equation,” the Virgin Atlantic spokesperson continued. “Heathrow says that its shareholders will contribute £2bn equity but it is ultimately consumers and airlines that pay the bill, with Heathrow's proposal to increase passenger charges by 28% in 2027 compared to today.”
Similarly, IAG welcomed Heathrow's plan to improve the passenger experience. A spokesperson for the company said the proposed charges are “excessive”. The spokesperson added: “The suggested £10bn investment would be paid for by passengers and airlines, raising serious concerns about affordability and value for money.”
Both airline companies labelled Heathrow as the “most expensive airport in the world”.
“Heathrow is already the most expensive airport in the world and this proposal demonstrates Heathrow’s inability to invest capital wisely and efficiently," continued the Virgin spokesperson. "Therefore, we continue to call on the CAA to undertake an urgent fundamental review of Heathrow’s economic regulatory model, which is simply not fit for purpose.”
The airport argued this proposed charge was still lower when compared to a decade ago in real time.
A person familiar with the matter said Heathrow's expansion is more of a “patch up” of its existing services and pointed to Hong Kong International Airport's huge expansion, which is valued at around $18bn expansion, as a sign of Heathrow's expansion valuation not “stacking up”.
“To compete with global hubs, we must invest,” said Heathrow CEO Thomas Woldbye. “Our five-year plan boosts operational resilience, delivers the better service passengers expect and unlocks the growth capacity airlines want with stretching efficiency targets and a like-for-like lower airport charge than a decade ago.”
The investment plan will span from 2027 to 2031.
The CAA will now review and evaluate the planned increase in charges. Heathrow said it will support the process alongside its airline partners. It is expected that airlines with stakes in Heathrow will submit their reviews in September. Additionally, a person familiar said a six month discussion process will take place where parties involved will try to reach a resolution and, for airlines, a more reasonable charge fee. They added that they would be “amazed” if the charge fees proposed today were upheld.