London’s Heathrow Airport says it wants to fund a £10 billion (€11.5 billion) improvement scheme by increasing passenger landing fees in a five-year plan that has infuriated airlines.
The airport, Europe’s busiest, is aiming to increase the size of terminals by the equivalent of “10 football pitches”, as well as creating new lounges, restaurants, and retail space, making the hub “more enjoyable, resilient and efficient”, according to a statement.
Part of the space required would come from demolishing Terminal 1, which is out of service, as well as extending Terminal 2 and redeveloping the Central Terminal Area. Other proposed changes include a new road tunnel and a boost to freight capacity of 20%. A third runway has also been in contention for years, and stakeholders were invited to put forward proposals by this summer.
Funding and impact
Heathrow has announced that 20% of the money required for the planned works would come from an equity injection from the airport owners, a consortium of investors, while additional funding would come from an increase in its landing fees.
Landing fees at Heathrow currently average £28.46 per passenger (nearly €33) for the period 2022 to 2026, and would go up to £33.26 per passenger (€38.35) from 2027 to 2031. That represents an increase of 17% although the airport has pointed out the charge “remains below 2014 levels in real terms”.
This would allow another 10 million passengers per year to be handled, boosting capacity by 12% and unlocking “the growth capacity airlines want”, said Thomas Woldbye, Heathrow’s CEO. Airlines and hospitality clients issued an excoriating attack on the value of the airport in February 2025, complaining of “ageing facilities and a declining customer experience” and comparing its infrastructure costs unfavourably to Istanbul’s brand new facility and new terminals at airports in Munich, Frankfurt, Madrid, and Barcelona.
Today, Heathrow submitted its new five-year business plan to the Civil Aviation Authority (@UK_CAA) for review: a £10bn privately funded investment for 2027–2031 to boost operational resilience, enhance the passenger experience, cut carbon and grow the UK economy.
— HeathrowNews (@HeathrowNews) July 11, 2025
The… pic.twitter.com/gut6g3AHhI
“Serious concerns about affordability”
But the reaction from airlines to the improvement and funding plans has been swift and angry. Virgin Atlantic argued “ultimately consumers and airlines that pay the bill” and criticised Heathrow’s “inability to invest capital wisely and efficiently.” Meanwhile, a spokesperson for British Airways’ owner IAG slammed the proposed increase in fees as “excessive” and raised “serious concerns about affordability and value for money.”
The plan is now set for appraisal by the UK’s Civil Aviation Authority (CAA), which Virgin called on to “undertake an urgent fundamental review of Heathrow’s economic regulatory model, which is simply not fit for purpose.” The regulator is responsible for setting the cap on charges.
