Airlines are warning that air travellers will be forced to pay for Heathrow Airport’s £10bn investment through higher air fares as it aims to add an extra 10 million passengers per year by 2031.
The Heathrow plan, submitted to the air regulatory Civil Aviation Authority (CAA), seeks to charge airlines an average of £33.26 per passenger during the period, Heathrow said, compared with an average of £28.46 between 2022 and 2026.
Virgin Atlantic, one of Heathrow’s biggest customers, said the airport needed to “do better and dramatically improve the customer experience if it is to become the airport that UK consumers deserve,” but accused the airport of wielding a “monopoly” power and questioned their value for money.
In a statement, they added: “Only Heathrow, with its monopoly power as the UK’s only hub airport, would think this £10bn investment plan represents value for money, and that’s before any third runway expansion costs are factored into the equation.
“Heathrow says its shareholders will contribute £2bn in equity, but it is ultimately consumers and airlines that pay the bill, with Heathrow’s proposal to increase passenger charges by 28 per cent in 2027 compared to today.
“Heathrow is already the most expensive airport in the world, and this proposal demonstrates Heathrow’s inability to invest capital wisely and efficiently.”
Virgin said the regulator needed to carry out an “urgent fundamental review of Heathrow’s economic regulatory model, which is simply not fit for purpose.”
International Airlines Group, which owns British Airways, welcomed plans to improve passenger facilities at Heathrow but called the charges “excessive” and said it requires “significant revision.”
“The proposed 25 per cent increase in charges is excessive, particularly given that Heathrow is already the most expensive airport in the world,” the company said.
“The suggested £10bn investment would be paid for by passengers and airlines, raising serious concerns about affordability and value for money.”
The group, which also operates Aer Lingus and Iberia, pointed out that the plan does not increase capacity.
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The airport expansion plans, which do not include the controversial third runway proposals, are at the centre of their 2027-2031 business proposal, submitted to the Civil Aviation Authority (CAA) air regulator on Friday.
If approved, it would see passenger charges paid by airlines being set at an average of £33.26 during the period, Heathrow said, up from an average of £28.46 between 2022 and 2026 – an increase of 17 per cent. In practice, the charges are passed on to travellers in the form of higher ticket prices.
Heathrow says the plans will lead to improved and faster security and baggage handling.
It aims for 95 per cent of passengers to wait less than five minutes at security, 99 per cent of bags to travel with their owner, and 80 per cent of flights to depart on time.
It also wants to demolish the building previously used as Terminal 1, extend Terminal 2 and build a new access road tunnel.
The investment plan will run from 2027 until 2031 and is in part funded through a £2bn contribution from the international shareholders who own the airport, the single biggest of which is French investment group Ardian.
Once complete, Heathrow said it will increase its passenger capacity by 12 per cent, equivalent to 10 million more travellers a year.
Heathrow chief executive Thomas Woldbye said: “We’re making good progress on our strategy to become an extraordinary airport, having become Europe’s most punctual major airport so far this year.
“But our customers want us to improve our international rankings further, as do we.
“To compete with global hubs, we must invest. 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.
“With Heathrow’s UK-based supply chain, this private investment will create jobs and drive national growth during this Parliament.
“We are ready to deliver the more efficient, sustainable Heathrow that will keep Britain connected to the world.
“That means faster security, smoother baggage handling, more comfortable terminals, new lounges, restaurants and shops – all while delivering a better service for the growing number of passengers who need assistance.”
Heathrow is Europe’s busiest airport, with more than 83.9 million passengers travelling through terminals in 2024.
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