Image: London Heathrow
Heathrow Airport has released its results for the six months of the year (2023) with the figures showing it welcomed 37 million passengers in a first half which included some of the busiest days on record.
Overall passenger numbers still remain consistently below pre-pandemic levels and the cost of living crisis is a material headwind for second-half demand. We have also now agreed on a fair two-year pay deal for all frontline colleagues.
Passengers can choose from over 225 destinations this summer as airlines add more routes and frequencies to their Heathrow networks.
Loganair has taken advantage of Heathrow’s lower domestic charges to increase routes and 12 UK airports are now connected to Heathrow, which also remains the best gateway in Europe for flights to the US (with 248 daily flights to 31 US destinations) and is currently better connected to India and China than European hub competitors.
British Airways has launched a new route to Cincinnati, JetBlue added another service to New York and LATAM has been allocated slots to begin a new non-stop connection to Lima, Peru.
Heathrow is preparing to kick off the next phase of its investment programme, with plans for up to £3.7 billion of passenger improvements that will include the replacement of the Terminal 2 baggage system and streamlining security in all terminals.
The airport’s adjusted losses before tax narrowed to £139 million in the first half. It stated that it remains lossmaking due to the CAA setting too low a revenue allowance in the H7 regulatory settlement to generate enough cashflow, which it has appealed. Its balance sheet is strong, with gearing well below pre-pandemic levels and £4 billion of liquidity, sufficient to cover all of its commitments for at least the next 24 months and it is not forecasting any dividends in 2023.
Heathrow is the first airport in the world to issue a sustainability-linked bond which includes ambitious targets for reducing carbon emissions from aircraft as well as on the ground. Later this year, Virgin Atlantic’s flight from Heathrow to JFK will be powered entirely by Sustainable Aviation Fuel (SAF) and Heathrow is urging policymakers to create a domestic sustainable aviation fuels industry which will create new green jobs, reduce costs for UK consumers and help achieve net zero targets.
John Holland-Kaye – who steps down as Heathrow CEO in October after nine years to be replaced by current Copenhagen Airport boss Thomas Woldbye – said: “The summer getaway has got off to a great start, thanks to planning and close collaboration with airlines and their ground handlers. I am immensely proud of what we have achieved as a team in the last nine years, transforming Heathrow into a world-class airport that Britain can be proud of. Heathrow is now a leader in sustainability, with a diverse culture that reflects our local community and can attract the best talent from around the world.”