Heathrow airport’s third runway planning costs set to reach £1bn

The original fee estimation was £500m in 2019

Planning costs for London Heathrow’s third runway may surpass £1bn, with air passengers charged extra to balance expenditure.

In July, airport chiefs wrote to the Civil Aviation Authority (CAA) to request an increase of £320m to Heathrow’s licence for expansion-related costs.

The additional £320m comes on top of the £500m of preparation costs forecast in 2019, bringing planning fees for the much-contested third runway to approximately £820m.

The request asks for permission to recoup the cost through higher passenger charges. Heathrow currently charges airlines an average of £28.46 per passenger in fees, and is lobbying to increase this to £33.26 in 2027.

Airlines have contested the price hike, with British Airways owner IAG Group calling the move “excessive,” according to Simple Flying.

In a letter to the CAA, Mike King, Heathrow director of regulation and economics, said that it is a government objective to deliver an operational third runway by 2035, not the airport’s.

The “demanding timeline” means preliminary planning fees alone could reach £1bn, reported The Times.

The total cost of the expansion plan is now expected to reach £49bn, of which around £21bn would be spent on the third runway.

The total cost of the expansion plan is now expected to reach £49bn, of which around £21bn would be spent on the third runway (Getty/iStock)

Read more: Why will Heathrow’s third runway be such a long haul?

A spokesperson for Heathrow told The Independent: “To unlock the benefits of expansion swiftly for consumers and the country, it’s right to invest early to meet the Government’s timeline for a new runway within a decade.

“These upfront costs reflect the complexity and expense of securing UK planning consents, and the inefficiencies of pausing and restarting major infrastructure projects.

“The system needs streamlining, and we support Government reforms to make it faster and more cost-effective to get approval for projects that grow the UK economy.”

Meanwhile, a rival Heathrow expansion plan headed up by a hotel tycoon is partnering with an airport in Singapore and promises flyers “ the best passenger experience in the world”.

Hotel tycoon Surinder Arora’s Heathrow expansion plan is being partnered with Singapore’s Changi airport, with features such as a swimming pool, cinema and butterfly garden.

It said that the “primary benefit” of its plan, named Heathrow West, is that it would avoid the costly and disruptive need to divert the M25 motorway.

Arora Group and Heathrow’s owners both recently submitted plans to the Department for Transport for a third runway at the west London airport.

Read more: Simon Calder tackles the key issues facing Heathrow’s expansion plans