Heathrow expansion: £10bn plan to boost capacity by 10 million
July 11, 2025
Heathrow is set to undergo its most substantial transformation in more than a decade with a privately funded £10 billion investment programme that will increase capacity by 10 million passengers a year.
The plan, which covers the period to 2031, focuses on expanding terminal space that would see passenger numbers grow to 92 million annually within five years.
This includes new lounges, restaurants, and retail outlets across an area of 70,000 square metres – equivalent to 10 football pitches.
Demolition of Heathrow Terminal 1
The work will also involve major upgrades to infrastructure such as the demolition of the now-defunct Terminal 1, the extension of Terminal 2, and construction of a new southern road tunnel to improve access.
Airlines have been critical of the proposal, particularly the impact it will have on the airport fees, which it is feared may lead to an increase in ticket prices.
Heathrow has set ambitious targets: 99% of baggage travelling with passengers, 80% of flights departing on time, and 95% of passengers clearing security in under five minutes.
Heathrow says it wants 95% of travellers to rate their experience as “good” or “excellent”.
On top of passenger improvements, the airport is planning a 20% boost in cargo handling.
Heathrow has submitted the proposal to the UK Civil Aviation Authority, which will now review the plan before giving its verdict.
Building Heathrow into an ‘extraordinary airport’
The development will be entirely funded through private investment, including a £2 billion equity contribution from shareholders.
Passenger charges would be set at £33.26, compared with an average of £28.46 between 2022 and 2026.
“This is a 100% privately financed investment in the UK’s hub airport that will make Heathrow more sustainable and prepared for a digital future. It can be delivered affordably with stretching efficiency savings of over £800 million and an airport charge that remains lower than it was a decade ago in real terms,” the company said.
Planned environmental benefits include the removal of 3 million tonnes of carbon – roughly 15% of Heathrow’s 2024 footprint – expanded noise insulation for 6,500 homes and 15 schools, and a commitment to maintain 100% renewable electricity. Additional targets include a 10% cut in waste and a 20% increase in recycling.
Heathrow CEO 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.”
Airlines are angry at plan to increase fees
Airlines have reacted angrily to the plans to increase fees.
Virgin Atlantic criticised the proposal, saying “only Heathrow, with its monopoly power as the UK’s only hub airport, would think that this £10bn investment plan represents value for money”.
IAG, the parent company of British Airways, Heathrow’s biggest customer, said the plan “requires significant revision” and described the uptick in fees as “excessive, particularly given that Heathrow is already the most expensive airport in the world and this plan does not increase capacity”.
