Airlines and businesses are calling for urgent reform of Heathrow’s funding model before any investment is made in the proposed third runway, warning that the airport’s current pricing structure makes expansion financially unsustainable.
Industry leaders are pressing the Civil Aviation Authority (CAA) to overhaul the regulations that dictate Heathrow’s charges, arguing that the airport is already the most expensive in the world. Without change, they claim, the third runway will not happen.
A spokesperson for the CAA confirmed that the regulator had received a formal request to review Heathrow’s economic framework and would “carefully consider” the proposal. Meanwhile, Heathrow’s management has indicated a willingness to explore a revised, longer-term funding structure for the expansion.
One of Heathrow’s most vocal critics, Surinder Arora, chair of the Arora Group, which owns 16 hotels and significant land around the airport, has questioned the viability of the third runway under the current system.
He argues that Heathrow imposes excessive charges on businesses operating within its boundary. At his Renaissance Hotel, located outside Heathrow’s perimeter, he pays 2.62p per unit for water. However, at his Hilton hotel next to Terminal 2, within the boundary, the charge rises to 23.27p per unit—costs that are ultimately passed on to customers.
Arora also cites extreme examples of overcharging, including airlines being billed £76,000 for the removal of three oak trees and Heathrow allegedly spending £1.1 million on a smoking shelter—expenditures that he claims would normally cost a fraction of that amount. Heathrow disputes these figures but maintains that investment is necessary to maintain operations and finance future expansion.
“The current monopoly at Heathrow doesn’t just vastly overcharge passengers on aviation fees, but also on parking and a variety of other services,” Arora said. “We are working with airlines to urge the CAA to scrutinise these regulatory issues and introduce competition to improve Heathrow’s value for passengers.”
With Heathrow’s expansion plans expected to cost upwards of £62 billion—triple the airport’s estimated current value—businesses argue that passengers and airlines will bear the financial burden.
“If the funding model stays the same, the third runway won’t happen,” Arora warned. “Heathrow has never delivered a major project on time or within budget. They want to increase passenger numbers by 50% but expect travellers to foot the bill—no business can survive that.”
Nigel Wicking, chief executive of the Heathrow Airline Operators Committee, echoed these concerns, highlighting the impact of rising charges on travellers.
“Heathrow is falling behind other major airports in both facilities and service, while maintaining the unenviable title of the most expensive airport in the world. This cannot continue,” he said.
“The airline community wants to support Heathrow’s growth and offer passengers a great experience, but the disproportionate costs imposed by Heathrow Airport Limited must be addressed.”
The UK government has backed the third runway in principle, provided expansion remains within noise, pollution, and carbon limits. Heathrow has announced plans to apply for planning permission by the summer, but businesses warn that without financial restructuring, progress will stall.
A Heathrow spokesperson defended the airport’s pricing, stating that expansion requires significant investment beyond routine maintenance. They argued that a “transparent process” is in place, with airlines required to approve all spending and the regulator ensuring value for money.
Selina Chadha, group director for consumers and markets at the UK CAA, confirmed that the regulator is assessing the case for a review.
“We will always focus on delivering in the interests of consumers, while supporting growth, investment, and efficiency,” she said.
As the debate over Heathrow’s funding model intensifies, the fate of the third runway—and the future of the UK’s biggest airport—remains uncertain.