UK regulator caps funding for early costs of Heathrow expansion

LONDON, July 29 (Reuters) - Heathrow Airport will be permitted to charge about 15 pence more per passenger in 2028 to pay for the early costs of expanding Britain's biggest hub, the aviation regulator said on Wednesday as it set out funding limits for the plan.

• Heathrow is operating at full capacity and the government has been moving ahead with its plan to build a new runway 15 miles west of London, which it wants open by 2035.

• The £33 billion ($43.87 billion) expansion plan will be privately-funded, and the Civil Aviation Authority regulator is considering what framework to use to facilitate it.

• British Airways-owner IAG and other airlines have warned that Heathrow is already one of the most expensive airports in the world and said costs need to be kept down.

• The CAA said funding for the early planning and design work will come by allowing the airport to recover what it spent in 2025 and 2026 through airport charges subject to a cap of £320 million.

• A competitor expansion scheme, which was not selected by the government, will be allowed to recover approximately £4.1 million of costs.

• The recovery of these early costs will increase the maximum airport charge per passenger by around 15 pence in 2028, rising to an estimated 30 pence in subsequent years, the CAA said.

• The CAA will consult later this year on arrangements for costs incurred from 2027 onwards.

($1 = 0.7522 pounds)

(Reporting by Sarah Young; Editing by Andrew Heavens)