Heathrow airport lost more than £500m over the summer and said there were signs of improvement but it did not expect passenger numbers to recover fully for five years.
The UK’s busiest airport on Tuesday reported “strong pent-up demand for travel” after the government eased some of its travel restrictions, including testing requirements for anyone flying into the country.
A total of 6.3m passengers used the airport between July and August this year, just 28 per cent of pre-pandemic levels but an increase from 2.2m passengers in the previous three months. It is the first quarter of passenger growth since the crisis began last year.
“We are on the cusp of a recovery which will unleash pent-up demand,” Heathrow chief executive John Holland-Kaye said.
But with high fixed costs and passenger numbers still well below normal levels, the airport lost £516m before tax in the three months to the end of September, bringing its losses for the year to £1.4bn.
Heathrow said it did not expect passenger traffic to fully recover until 2026.
“At least we are recovering. On our busiest days we are back to 45 per cent of pre-pandemic levels, that is something we were only dreaming of six months ago,” Holland-Kaye said.
The major airlines that use Heathrow have also reported a rise in demand, but most are still expected to post heavy losses going into the traditionally weak winter months.
The airport has proposed steep increases to its landing charges to help recover its £3.4bn of total pandemic losses, leading to a bitter clash with airlines, which have called for the airport’s owners to absorb more of the losses.
The Civil Aviation Authority last week blocked Heathrow from doubling its landing fees, but said it would consider allowing a rise of as much as 50 per cent.
Holland-Kaye said the airport’s group of owners had lost money when accounting for inflation over the past 15 years, and that the CAA’s rules on how much the airport could charge airlines to take off and land “are not working”.
With £4.1bn in cash, the airport said it had enough liquidity to see it through the crisis, and had reduced its monthly cash burn by half to £88m.
Its net debt was £15.4bn at the end of September, which chief financial officer Javier Echave said was “massively above” a comfortable level.
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