Heathrow posts £60mn loss after tax in first quarter

Heathrow remained lossmaking in the first quarter despite a rebound in passenger numbers, which the UK’s biggest airport blamed on the curbs the UK regulator has put on the fees it charges airlines.

Britain’s biggest airport said on Wednesday that it did not expect to pay its owners a dividend in 2023 after it reported a pre-tax £60mn loss in the first three months of the year.

Heathrow said it failed to return to profit following the pandemic because of the Civil Aviation Authority’s refusal to allow it to raise its landing fees significantly.

The regulator in March ruled that landing fees at the hub airport should fall from the current £31.57 per passenger to £25.43 from next year. The charges are typically passed straight to consumers through ticket prices, and Heathrow has some of the highest in the world.

Last week, the airport appealed the CAA’s decision to the UK’s competition regulator, deepening a feud with its large customers including British Airways and Virgin Atlantic, which have been pushing for lower landing charges.

The airport’s pre-tax loss was heavily affected by the cost of servicing its debt, which rose to £442mn in the first quarter, up from £308mn a year earlier, driven by rising inflation.

Heathrow did, however, report an operating profit of £309mn in the first quarter, as revenues rose nearly 60 per cent year on year to £814mn. Almost 17mn passengers travelled through the airport over the three months, up from 9.7mn a year earlier.

Heathrow said the rebound in passenger numbers was driven by outbound leisure travel, while business travel accounted for 29 per cent of its overall traffic, compared with 35 per cent in the same period before the pandemic.

Passengers using the airport have not suffered any significant disruption this year, and Heathrow said it expected people to be able to travel “as normal” during the busiest periods in May, which includes school half-term holidays and the UK coronation, despite a planned strike of security guards by the Unite union.