UK. Heathrow Airport today reported results for the nine months ended 30 September, with revenue surging by +203% year-on-year to £2,106 million against the backdrop of sharply rising traffic.
In the first nine months, 44.2 million passengers travelled through the airport compared to just 10.2 million a year earlier. Passenger numbers in September were close to 5.8 million, which was -15% below 2019 levels, the highest since the start of the pandemic.
While demand continues to be driven by outbound leisure, said the airport company, inbound leisure and business travel are showing signs of recovery. During the third quarter, business travel reached 21.5% of overall traffic, compared to 28% in the same period pre-pandemic. Encouragingly, from 30 October Heathrow will remove the cap on departing passengers that it imposed in July to cope with demand.
For the full year, Heathrow is forecasting that it will serve 60-62 million passengers, around -25% behind 2019 levels. But the company said that it did not expect a swift return to previous traffic highs.
“Headwinds of a global economic crisis, war in Ukraine and the impact of COVID-19 mean we are unlikely to return to pre-pandemic demand for a number of years, except at peak times,” it said.
Retail revenue in the first nine months increased by +238.5% year-on-year, driven by higher departing passenger numbers, car parking revenue, premium services and a greater mix of retail services available compared to last year. Retail revenue per passenger increased +22.2% to £9.34.
Adjusted EBITDA increased +970% to £1,252 million. The group recorded a £463 million profit after tax compared to a loss of £1,323 million a year earlier.
The airport company said that its priority was to “build back the airport eco-system to meet demand at peak times”. To do this, it said, businesses across the airport need to recruit and train up to 25,000 security cleared people – “a huge logistical challenge”. Heathrow has established a recruitment taskforce to help fill vacancies, working with the government on a review of airline ground handling and appointing a senior operational executive to invest in joint working.
The company noted: “Our underlying losses have increased to £0.4 billion in the year to date as regulated income fails to cover costs, adding to the £4 billion in the prior two years. We have acted responsibly in the face of an uncertain market to protect liquidity and cashflow and reduced gearing. We are not forecasting any dividends this year.”
CEO John Holland-Kaye said: “We can be proud that everyone at Heathrow pulled together to serve consumers this summer – ensuring 18 million people got away on their journeys, more than any other airport in Europe, with the vast majority experiencing good service.
“We have lifted the summer cap and are working with airlines and their ground handlers to get back to full capacity at peak times as soon as possible. As we look to the future, we encourage the Civil Aviation Authority to think again at stimulating the long-term investment that will deliver the smooth and predictable journeys consumer value most, rather than focusing on short-term pricing which we have seen only benefits airline profits.”
