CAA Review Proposes Competition in Heathrow Third Runway Construction and Operation

The Civil Aviation Authority has published a review proposing changes to the regulatory model governing how Heathrow runs and covers its costs. The review calls for the airport operator to seek bids from other businesses to design, build and operate parts of its third runway and new terminal expansion.

The CAA stated that rival bids would allow for direct competition between Heathrow and an alternative developer and could encourage competition and efficiency.

Its most radical suggestion would allow another developer to tender to build and run their own terminals at Heathrow, similar to a scheme at JFK airport in New York. That proposal would require special approval from the government. Last November ministers backed Heathrow’s plan for the third runway to be in operation by 2035.

The airport is seeking formal planning approval to start construction by 2029. Philip Jansen, Heathrow’s new chair, moved to open talks with airlines and Arora Group’s chair Surinder Arora earlier in May 2026. British Airways accounts for more than 50% of slots at Heathrow.

Luis Gallego, the chief executive of International Airlines Group, said the cost of the third runway and associated works must be capped at £30bn. In March 2026 the UK aviation regulator rejected Heathrow’s plans to raise its landing fees. Arora Group is promoting a £25bn expansion scheme for Heathrow and is part of Heathrow Reimagined, which also includes British Airways and Virgin.

“Two years ago competition at Heathrow wasn’t on the cards and now is very much alive and kicking because the case for change is so strong,” Surinder Arora said. ” The CAA said there could be difficulties in implementing a model allowing rival bidders.

“It would be important to ensure that an approach involving the build, operation, ownership of assets and direct competition with Heathrow worked in a way to further the interests of consumers across the whole airport,” the regulator added.

A Heathrow spokesperson said economic growth is key to tackling the cost of living crisis. The spokesperson added that the airport has a clear plan to invest billions of pounds of private capital to upgrade and expand the UK’s hub airport – creating jobs and growth across the country.

Heathrow is owned by a consortium of investors led by the French company Ardian and includes the sovereign wealth funds of Qatar, Singapore and Saudi Arabia.

The Guardian reported that Heathrow warned the proposals could undermine efforts to expand the airport and produce growth. The airport operator said it supports reform that boosts efficiency, cuts red tape and keeps investment flowing.