Heathrow: Britain’s trade falling behind Europe
Heathrow is critical of travel restrictions
The UK is losing cargo and tourism income as European competitors seize advantage of less restrictive travel, according to Britain’s biggest airport.
Cargo volume at Heathrow remains 18% down on pre-pandemic levels, while Frankfurt and Schiphol are up by 9%.
“Britain is losing out on tourism income and trade with key economic partners like the EU and US because Ministers continue to restrict travel for passengers fully vaccinated outside the UK,” said Heathrow in its half-year statement.
Trade routes between the EU and the US have recovered to nearly 50% of pre-pandemic levels while the UK remains 92% down.
Cumulative losses have grown to £2.9 billion, but cash burn has been cut by more than 50% against the first half of 2019, with a 35% reduction in operating costs and a 77% cut in capex.
Prudent financing action has increased liquidity by 49% to £4.8 billion since the start of the pandemic, providing sufficient cover to meet all commitments until October 2022 in the extreme no revenue scenario.
“With continued travel restrictions causing some uncertainty over passenger numbers, we have taken the prudent step to seek creditor approval to waive the Heathrow Finance ICR covenant for FY 2021,” said the company.
Fewer than four million people travelled through Heathrow in the first six months of 2021, a level that would have taken just 18 days to reach in 2019.
“Recent changes to the Government’s traffic light system are encouraging, but expensive testing requirements and travel restrictions are holding back the UK’s economic recovery and could see Heathrow welcome fewer passengers in 2021 than in 2020.”
Heathrow called for continued financial support as long as restrictions remain on travel.
“Travel is now the only sector still facing restrictions, and for as long as it does, Ministers should provide financial support including an extension to the furlough scheme and business rates relief.
“Heathrow pays nearly £120 million a year in rates, in spite of being loss making; the government is changing policy to prevent us from reclaiming overpayments and we are challenging this in the High Court.”