London Heathrow airport raised its passenger forecast but warned that demand is likely to drop off later in the year as a summer travel boom gives way to a “winter freeze.”
The airport, Europe’s biggest hub before the Covid-19 pandemic, said it expects to host 52.8 million passengers this year, up from a previous view of 45.5 million. It will remain unprofitable this year after total losses from coronavirus disruption reached 4 billion pounds ($5.1 billion).
While outbound bookings have strengthened since the UK dropped Covid-19-related travel curbs, the airport said Tuesday that airlines are already cancelling services into the fall, and higher fuel costs, a slowing economy and Russia’s war in Ukraine will all drag on demand.
“We are still in a pandemic with many markets still closed, nearly 80% with testing and vaccination requirements and another variant of concern could see the return of UK travel restrictions,” the airport said in a statement.
Heathrow airport sees demand dipping again on ‘winter freeze’
Image: Bloomberg
London Heathrow airport raised its passenger forecast but warned that demand is likely to drop off later in the year as a summer travel boom gives way to a “winter freeze.”
The airport, Europe’s biggest hub before the Covid-19 pandemic, said it expects to host 52.8 million passengers this year, up from a previous view of 45.5 million. It will remain unprofitable this year after total losses from coronavirus disruption reached 4 billion pounds ($5.1 billion).
While outbound bookings have strengthened since the UK dropped Covid-19-related travel curbs, the airport said Tuesday that airlines are already cancelling services into the fall, and higher fuel costs, a slowing economy and Russia’s war in Ukraine will all drag on demand.
“We are still in a pandemic with many markets still closed, nearly 80% with testing and vaccination requirements and another variant of concern could see the return of UK travel restrictions,” the airport said in a statement.
There’s therefore no prospect for a return to profit or the resumption of dividend payments this year, even after pent up demand led adjusted earnings before interest, tax, depreciation and amortisation to turn positive in the first quarter.
Heathrow had a loss of 1.8 billion pounds last year, narrowing slightly from 2020, after passenger numbers slumped to the lowest since 1972. The break-even point comes at about 65 million annual passengers, the airport has said previously.
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