Heathrow Airport
Heathrow Investor Report June 2021 – Key Takeaways
Heathrow Airport published its latest Investor Report in June, featuring forecasts for traffic and revenue for the year (see main feature, previous page). On performance this year, Heathrow traffic is estimated to fall by -2.7% to 21.5 million passengers compared to 2020. Adjusted EBITDA in 2021 is forecast to increase +23% to £332 million on revenue of £1,210 million, up by +3%. Retail income is expected to decrease -19.2% to £189 million compared to 2020. On revenue protection and mitigation, Heathrow said in the Investor Report: “Whilst we are waiting for traffic to return to normal levels, we are seeking opportunities to optimise our revenue with digital technology and reduce risks associated with bad debts. In the meantime, it is disappointing that the Treasury has baked-in a competitive disadvantage for UK tourism by making this the only country in Europe not to offer tax free shopping. While the Court recognised that the government’s consultation process was flawed, the government still chose to press ahead with this ill-considered decision. At a time when Ministers should be doing everything they can to help stimulate the country’s economic recovery, we would urge them to look again at all of the clear evidence which proves the revised policy is damaging for tens of thousands of jobs across the country.”
Monthly traffic forecast 2021
(millions of passengers)
Source: Heathrow Airport
On restarting international travel, the airport company said: “As vaccination rates increase and infection rates lower, the government should grant ‘green’ status to more low-risk countries, such as the US. We also call for a change to the testing requirements so that testing becomes more affordable, for instance removing VAT and integrating the use of cheaper and quicker lateral flow tests. Finally, the bottlenecks we have experienced at the border must be addressed urgently. We continue to work with government to create automated and simplified border checks and to ensure that all desks are resourced at peak times.” Heathrow also addressed how it is aiming to attract more traffic under three main strategies. These include building back to support 80% of incumbent airlines flying, although on reduced schedules; consolidation of London operations at Heathrow among British Airways, Virgin Atlantic and other airlines, plus encouraging new entrants. For example, said Heathrow, 15 airlines have now taken up the opportunity to fly from Heathrow including JetBlue, Smartwings and Arkia due to start in coming weeks.
Annual traffic forecast vs. 2019 levels
(millions of passengers)
Source: Heathrow Airport
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The Moodie Davitt eZine Issue 298 | 6 July 2021
The Moodie Davitt eZine is published 15 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail sinead@moodiedavittreport.com