Heathrow posts GBP60m loss in Q1

Heathrow airport has said it remained lossmaking in the first quarter despite a recovery in passenger numbers, blaming a cap on the fees it can charge airlines and the rising cost of servicing its debt. The UK’s biggest airport said on Wednesday that it did not expect to pay its owners, a group of international investors led by Spanish infrastructure company Ferrovial, a dividend in 2023 after it reported a GBP60m pre-tax loss in the first three months of the year. In March, the Civil Aviation Authority told Heathrow to cut landing fees from the current GBP31.57 per passenger to GBP25.43 from next year. The charges are typically passed straight on to consumers in ticket prices, and Heathrow has among the highest landing charges in the world. Last week, the airport appealed against the CAA’s decision. Heathrow’s biggest customers, including British Airways and Virgin Atlantic, have been pushing for lower landing charges. The cost of servicing Heathrow’s GBP15b of debt rose significantly, from GBP308m in Q1 2022 to £442mn in the same period this year. It last paid its owners a dividend — of GBP100m — in February 2020. The airport did, however, report an operating profit of GBP309mn in Q1, while revenues rose almost 60% year on year to £814mn. Almost 17m passengers passed through Heathrow in the three months, up from 9.7m a year earlier. The airport said the recovery in passenger numbers was driven by leisure travel, while business travel accounted for 29% of traffic, compared with 35% in the same period before the pandemic. It has revised up its 2023 traffic forecast to between 70m and 78m passengers, up from a February figure of 58m to 73m. John Holland-Kaye, Heathrow’s CE, said the UK had become “less attractive” for pension funds and other infrastructure investors because of low returns. <br/>