Heathrow limits full-year loss to £684m after ‘challenging’ restart
James ChappleHeathrow limited its full-year pre-tax loss last year to £684 million, down from £1.27 billion, during what outgoing boss John Holland-Kaye described as a "year of recovery" – albeit one that left the global aviation sector "deeply scarred".
Inflation, lower passenger numbers and "insufficient regulated charges" impacted Heathrow’s underlying profitability, the airport said on Thursday (23 February). No dividends were paid in 2022, and none are planned for 2023, Heathrow has confirmed. Holland-Kaye said 2023 would be "a year of renewal" for Heathrow.
The airport said its financing would remain conservative, and stressed it retained a strong liquidity position – adding investment in passenger service over the coming years would now be dependant on a ruling by the CAA, due in March, on passenger fees for the next five years.
Heathrow’s passenger numbers trebled in 2022 to 62 million, which is around 77% of 2019 levels (80.9 million). The airport said its recovery was impacted by two years of UK border closures, which were "tougher in the UK than in other major markets".
"Rapid growth" from 19.4 million passengers in 2021 to 62 million in 2022 posed operational challenges, said Heathrow, necessitating the introduction a 100,000 daily passenger cap during the summer, which carried over into the autumn. "We were successful in getting as many people on their way as possible by keeping supply and demand in balance," the airport insisted.
On service levels, Heathrow said border closures and the subsequent loss of skills during the pandemic owing to reduced demand had left the global aviation sector "deeply scarred", adding it would yet take some time for the sector to fully recover.
"More than 25,000 people have started work at Heathrow in the past 18 months and resource levels are now close to pre-pandemic levels," said the airport, adding its focus would now be on improving skills, experience and "building resilience".
SAF progress critical
Heathrow has tripled its sustainable aviation fuel (SAF) target for 2023, and said this supply was already over-subscribed. "SAF will play a critical role in decarbonising the sector," said Heathrow after creating a £38 million incentive scheme to encourage airlines to switch kerosene for SAF.
Later this year, Virgin Atlantic will operate the first 100% SAF-fuelled transatlantic flight to New York. "The faster we scale up SAF production the faster we can decarbonise aviation," added Heathrow, which has called on the government to create a policy framework that would allow a new multibillion-pound SAF industry prosper in the UK.
"2022 may have been a year of recovery, but 2023 is shaping up to be a year of renewal for Heathrow," said Heathrow chief executive Holland-Kaye, who confirmed earlier this month he would stand down this year after nine years in the role.
"Our teams have already delivered a successful Christmas and half-term getaway, and with a great investment plan in place, we are determined to once again rank in the top 10 airports for service."
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