London Heathrow Airport has announced an annual loss of £2bn in the year end December 31, 2021 due to the devastating impact of COVID-19 on aviation.
Passenger numbers collapsed to 22.1m due to border closures and travel restrictions. More than half of those travelling in 2020 did so in January and February, before COVID restrictions. Overall revenue fell 62 per cent to £1.2bn and adjusted EBITDA fell to £270m.
A statement on Heathrow Airport’s website read: “Government policies over recent months have effectively closed borders. We have had no government support, other than furlough, and have not been given relief from business rates, unlike other airports, retail and hospitality businesses. The March Budget is the key opportunity for the Chancellor to support the sector by providing 100 per cent business rates relief, extending the furlough scheme and reversing the tourist tax.”
£3.9bn liquidity will see airport through to 2023
The statement added: “Airports have very high fixed costs. We acted quickly to cut gross operating costs by nearly £400m, reduced capital expenditure by £700m and raised £2.5bn in funding including a £600m capital injection. We ended the year with £3.9bn of liquidity, enough to see us through until 2023.”
Heathrow has called on the Civil Aviation Authority (CAA) to unlock lower airport charges and higher investment in passenger service and resilience. As well as a drop in passenger numbers, Heathrow has also experienced a 28 per cent decline in cargo volumes. Passenger planes from Heathrow also carry British exports and inbound supply chain. The statement warned that economic recovery would be held back until long haul passenger flights are restarted to key markets such as the US.
Unique opportunity to agree “common international standard”
The statement continued: “We support the Prime Minister’s plan to restart travel and the economy – We will work with the Global Travel Taskforce, so that Britain can become the first country in the world to safely restart international travel and trade at scale, saving thousands of jobs and reinvigorating the UK economy. The Prime Minister has a unique opportunity to agree a common international standard for safe travel with other world leaders when he hosts the G7 in June.”
Heathrow expansion was described as “mission critical to delivering “Global Britain.”” The statement added: “With the Supreme Court reinstating the Airports National Policy Statement, we will consult with investors, Government, airline customers and regulators on our next steps.”
UK is on “cusp of becoming first country in world to safely resume international travel”
Heathrow CEO John Holland-Kaye said: “2020 has been one of our most challenging years – but despite £2bn of losses and shrinking to passenger levels we haven’t seen since the 70s, I am hugely proud of the way that our colleagues have kept our passengers safe and the UK’s hub airport open for vital supplies throughout. We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale. Getting aviation moving again will save thousands of jobs and reinvigorate the economy, and Heathrow will be working with the Global Travel Taskforce to develop a robust plan underpinned by science and backed by industry. The Prime Minister will then have the unique opportunity to secure global agreement on a common international standard for travel when he hosts the G7 in June. In the meantime, we need next week’s Budget to support aviation’s recovery by extending furlough and providing 100% business rates relief.”
Heathrow has remained open throughout the pandemic by maintaining high safety levels. It has also helped to develop international standards for safe travel through airports and invested in COVID-secure technologies and testing facilities for up to 25,000 passengers a day to help restore international travel safely.
