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Heathrow to make loss despite passenger surge

Heathrow is forecasting a 16% rise in passengers

Heathrow Airport said it expects to remain loss-making this year, though it increased its 2022 passenger forecast by 16% to nearly 53 million, saying 5 million travellers passed through in April, driven by outbound holidaymakers.

It said 97% of passengers passed through security within ten minutes compared to queues of over three hours at other airports. It will be reopening Terminal 4 by July and is already recruiting up to 1,000 security officers.

“The ongoing war in Ukraine, higher fuel costs, continuing travel restrictions for key markets like the United States and the potential for a further variant of concern creates uncertainty going forward,” it said in an update.

“Together with last week’s warning from the Bank of England that inflation is set to pass 10% and that the UK economy will likely ‘slide into recession’ means we are taking a realistic assessment that travel demand will reach 65% of pre-pandemic levels overall for the year.”

Heathrow expects to remain loss-making throughout this year and does not forecast paying any dividends to shareholders in 2022.  Some airlines have predicted a return to profitability this quarter and expect to resume paying dividends as a result of the ability to charge increased fares.

The airport urged the CAA to set “common sense” charges that can “deliver the investments passengers want with affordable private financing while withstanding the shocks which are undoubtedly to come.”

Heathrow CEO John Holland-Kaye said: “While I am encouraged by the rise in passenger numbers, we also have to be realistic.

“There are significant challenges ahead – the CAA can either plan for them with a robust and adaptable regulatory settlement that delivers for passengers and withstands any shocks, or it can prioritise airline profits by cutting back on passenger service leaving the industry to scramble when things go wrong in future.”

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