25 per cent down: Heathrow boss warns ‘many years’ until pre-Covid flying levels reached
It will take some time for Heathrow to go back to pre-pandemic levels, according to the airport’s boss John Holland-Kaye.
The west London hub expects between 60 and 62 million people to pass through its gates this year, 25 per cent down on the 81 million posted in 2019.
Heathrow also reported 18 million passengers over the summer, regaining its status as Europe’s busiest hub after two years of pandemic.
“It’s worth bearing in mind that [2019] was a time of a booming economy, peak globalisation [and] low interest rates,” Holland-Kaye told City PM “We’re not going to see those circumstances again for many years.”
According to the chief executive, the airport will not get back to 2019 levels before 2025-2026 due to geopolitical and economic uncertainties such as the war in Ukraine and the cost-of living crisis.
“I think there will certainly be some reduction in discretionary spending as a result of the cost of living issues,” Holland-Kaye commented.
“Of course there are [also] uncertainties around the Ukraine war and the global economy, which is going to affect some business travellers.
“It’s hard to know how demand is going to develop.”
In the nine months to 30 September, the airport posted a profit before tax of £643m – up from a loss of £1.4bn last year.
However, as its adjusted loss before tax was at £442m, Heathrow is calling on the aviation regulator, the CAA, to increase its passenger price cap.
A major point of contention between the airport and its airline customers, passenger charges were increased earlier this year to help Heathrow recover from the devastating impact of Covid on its finances.
Set by the CAA in December at £30.19, the interim cap disappointed both Heathrow and the airlines, which accused the airport of downplaying its recovery.
“The fact that we’re still loss-making [while] airlines returned to profit tells you the CAA got the overall balance wrong,” the chief executive concluded on Wednesday.
The regulator said a final decision will be made in due course.
City PM has approached airline trade body Airlines UK for comment.