Heathrow lands first profit since 2019 on global travel rebound

The west London airport reported underlying pre-tax profits of £38 million in 2023, against losses of £684 million the previous year.

Heathrow has returned to profit (PA) (PA Wire)

Heathrow has returned to profit for the first time since the pandemic thanks to a bounce-back in international travel.

The owners of the UK airport reported underlying pre-tax profits of £38 million in 2023, against losses of £684 million the previous year and marking the first time it has made a profit since 2019.

It saw a 28.6% jump in passengers travelling through its terminals, to 79.2 million, capped off by a strong end to the year, with the group having cheered its busiest-ever December.

And Heathrow forecast that a record number of passengers would use the airport this year, pencilling in a rise to 81.4 million in 2024.

The airport’s current busiest year was 2019, before the coronavirus pandemic, when passenger numbers reached 80.9 million.

Heathrow is continuing to develop its plan to build a third runway, which has been delayed by legal challenges and the coronavirus pandemic.

Thomas Woldbye, Heathrow’s recently appointed chief executive, said the expected growth in passenger numbers “firms up the business case” for building a third runway, and the project will “absolutely” be something the airport will focus on this year.

Mr Woldbye told the PA news agency the airport will publish a “revised strategy” in the coming weeks, which will include plans for expansion and increasing capacity by alternative methods.

He said: “We need to not only focus on the third runway of course – which needs to be updated so we have the right facts for that decision, we’re going to make that a reality in the right way – but also what kind of capacity can we create within the current boundaries of Heathrow to make sure that we can serve our passengers as best as possible.”

Asked if he is confident a third runway can be built, Mr Woldbye replied: “This is a huge project of huge significance to the UK, to our airlines, to the passengers, but also all the people around Heathrow.

“We’re very aware of our responsibility in that regard and making sure that we come up with the right decision.

“At the current time I can’t be sure of that much, but that is exactly the process we are going to go into, to make sure we have the right basis to take the right kind of decision for all the people and all the stakeholders that are involved.”

Heathrow said it was being hampered by the “huge cost challenge” set by the UK aviation regulator, having been a vocal critic of the Civil Aviation Authority’s move not to allow it to raise its landing fees further.

Mr Woldbye said: “2023 was a good year for Heathrow from a challenging start to a great finish.

“We delivered much improved service for our customers, and managed to turn a small profit after three consecutive years of losses.

“That’s a great platform to build on, although in 2024 we are expected to deliver even further improved service to more passengers, but with airport charges cut by 20% in real terms.

“We will have to pull every lever to become more efficient and make tough choices on where we spend and invest our money to overcome the huge cost challenge set by the CAA and remain profitable over the next three years.”

The CAA reduced the cap on Heathrow’s average charge per passenger from £31.57 for 2022 and 2023 to £25.43 over the following three years.

Heathrow figures show 63.4% of flights departed within 15 minutes of the schedule last year, up from 59.0% during the previous 12 months.

The results come less than two months after Saudi Arabia’s sovereign wealth fund agreed to buy a 10% stake in Heathrow Airport.

Spanish infrastructure giant Ferrovial sold its 25% share in Europe’s busiest airport to the Saudi Public Investment Fund (PIF) and to French firm Ardian, which secured a 15% stake.

Ferrovial had been the airport’s largest shareholder since 2006 before the sale.