Heathrow’s pandemic losses top £4bn

Heathrow welcomed 9.7 million passengers in the first quarter of 2022 in line with its forecasts – but forecasts it will remain loss-making throughout this year.

The airport said January and February were much weaker than expected because of Omicron-related travel restrictions, but demand increased after the quick removal of all UK travel restrictions on March 18.

It said losses during the pandemic have now topped £4 billion and, despite increased outbound demand, the airport is not forecasting a return to profit and dividends in 2022.

Revenue in the first quarter of Q1 2022 rose to £516 million, compared to £165 million in Q1 of 2021.

It said it saw a surge of last-minute bookings for the Easter holidays, with more than 95% of passengers through security within five minutes.

Terminal 4 will open by July and more than 1,000 new security officers are being recruited, while airlines, ground handlers and retailers aim to fill 12,000-plus vacancies across the airport.

The 2022 passenger forecast has been increased from 45.5 million to 52.8 million, which represents a return to 65% of pre-pandemic traffic this year.

However, the airport said demand remains “very volatile” and it expects passenger numbers to “drop off significantly” after the summer.

“We are already seeing airlines cancelling services into the autumn and the realities of higher fuel costs, lower GDP growth, the war in Ukraine and the ongoing pandemic will drag on demand,” it said in a statement.

“We are still in a pandemic with many markets still closed, nearly 80% with testing and vaccination requirements and another variant of concern could see the return of UK travel restrictions.”

The airport also claimed that pricing proposals by the Civil Aviation Authority will make the experience for passengers worse.

“We do not accept the CAA’s current proposals which will see passengers faced with longer queues and more frequent delays, as well as threatening Heathrow’s ability to fund itself affordably,” it said.

John Holland-Kaye, Heathrow chief executive, said: “I want to reassure passengers that we’re redoubling our efforts to ensure this summer’s journeys go safely and smoothly.

“These past few weeks have only reinforced our view that passengers want easy, quick and reliable journeys every time they travel and we can continue to deliver that for less than a 2% increase in ticket prices.

“The CAA should be aiming to secure this win for passengers instead of pushing plans which will cut investment in service, increase queues and make delays a permanent feature post-Covid.
“We have a lot of work to do to reclaim Heathrow’s crown as Europe’s largest airport which will deliver more competition and choice for passengers and more growth for Britain, and we need the regulator to help us do it.”

Picture by Brookgardener/Shutterstock

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