Watch: Heathrow flags tepid travel recovery until 2026
Heathrow airport said it was poised for growth in its financial results on Tuesday, despite the fact that traffic is not expected to fully recover until at least 2026.
In the third quarter, Britain's largest airport experienced its first full quarter of passenger growth since 2019, underscoring what it called strong pent-up demand as travel restrictions eased and testing requirements were simplified.
Passenger numbers recovered to 28% of pre-pandemic levels and cargo to 90%.
Airports have very high fixed costs and despite a more than 30% reduction in operating costs, Heathrow has lost £3.4bn cumulatively since the start of the pandemic and remains loss-making today.
"We have the financial strength, with £4.1bn of cash, to be able to come through until the market recovers," it said in a release.
Heathrow said its shareholders have achieved negative returns in real terms over the last 15 years and that the Civil Aviation Authority’s initial proposals do not go far enough to ensure that investors can achieve a fair return in the airport's next regulatory period, H7, which begins on 1 January.
It said that is key to securing future private investment in passenger service and resilience for Britain’s hub airport.
“We are on the cusp of a recovery which will unleash pent-up demand, create new quality jobs and see Britain’s trade roar back to life – but it risks a hard landing unless secured for the long-haul," said John Holland-Kaye, Heathrow CEO.
"To do that, we need continued focus on the global vaccination programme so that borders can reopen without testing; we need a fair financial settlement from the CAA to sustain service and resilience after 15 years of negative real returns for investors; and we need a progressively increasing global mandate for sustainable aviation fuels so that we can protect the benefits of aviation in a world without carbon.”
Earlier this month, Heathrow had said that its post-pandemic recovery was lagging European rivals as traffic levels hit just 40% of pre-pandemic levels in September.
Reiterating that point in its third quarter results, it said the lag was due to tighter travel restrictions and testing rules in the UK.
England recorded 33,221 cases in its latest daily figures, a 16% decrease on last Monday when there were 39,473 cases.
Last Sunday, testing rules relaxed meaning that fully vaccinated people arriving in England from a non-red list country can use a lateral flow test rather than the more expensive PCR version on or before day two.
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