Heathrow expects passenger numbers to fall 97 per cent during ‘major crisis for aviation’
Heathrow Airport has called the coronavirus outbreak a “major crisis for global aviation” as it said passenger numbers for last month are expected to be down 97 per cent.
The figures
Passenger numbers dropped 18.3 per cent during the first quarter to 14.6m.
Heathrow expects numbers to be down 97 per cent in April. It is more than the anticipated 90 per cent drop the airport had predicted a few weeks ago.
Revenue declined 12.7 per cent from £679m to £593m. Aeronautical revenue and retail revenue both plunged, 16.3 per cent and 15 per cent respectively, due to the dramatic reduction in passenger numbers.
Profit before tax dropped a staggering 310 per cent to minus £278m.
Why it’s interesting
The airline industry has been hit hard by travel restrictions and social distancing measures. However, Heathrow said its £3.2bn in liquidity was “sufficient to maintain the business at least over the next 12 months, even with no passengers”.
Heathrow said it had taken immediate action to conserve cash and reduce costs by around 30 per cent. Last month senior executives said they will take pay cuts to limit the damage done by the coronavirus outbreak.
Heathrow predicts demand will remain weak until governments around the world deem it safe to lift travel restrictions. It said it was working with partnerst to establish a “Common International Standard” for safe air travel to help the economy recover.
Chief executive John Holland-Kaye said: “When we have beaten this virus, we will need to get Britain flying again so that the economy can recover as fast as possible.”
The airport also said that due to the crisis any expansion plans would be pushed back by at least two years.
In February the Court of Appeal ruled that the long-running plans to build a third runway at Heathrow did not take into account the Paris Climate Accords.
Although the government declined to review the decision, Heathrow has applied for permission to do so.
What Heathrow said
Chief executive John Holland-Kaye said:
Our industry is struggling. It’s hard to imagine that 2019 was our busiest year ever with 81 million passengers. Now only five months into 2020, we’re operating from a single runway, we’re consolidating our operations into only two terminals and our daily passenger numbers have shrunk to the thousands. This is a major crisis for global aviation and no one can be sure of how fast we will recover from it.
The actions we are taking now are ones that none of us like having to do; reducing pay, restructuring the organisation, renegotiating contracts, consolidating down to just two terminals and a single runway. But this is what we have had to do to survive and remain competitive.