London’s Heathrow Airport has raised its revenue forecast for the year by £41 million ($56.1 million), despite warning of weakening demand for US business travel.
Within a June investor report Heathrow stated that economic uncertainty in North America has made the market “challenging”, noting that business-heavy routes to the US are showing “early signs of softness” due to economic concerns, while leisure routes remain stable.
Europe’s busiest airport said that it had recorded a 0.5% increase in passenger traffic between January and May of this year, which has been driven by Latin America, Middle East and Asia-Pacific traffic.
“Transatlantic travel remains a core strength in our network however, we acknowledge the overhanging uncertainty in this market, and we continue to monitor airline and passenger behaviour closely as the summer progresses,” the report stated.
Heathrow now forecasts revenue of £3.6bn ($4.92bn), comprising of £2.25bn ($3.08bn) of aeronautical revenue and £1.35bn ($1.84bn) of non-aeronautical revenue, on the back of higher revenues from long-haul regions. This revenue is expected to be up 1.4% on the year prior.
The airport has maintained prior guidance that it will serve 84.2 million passengers during 2025, up 0.5% on 2024.
For the remainder of the year, Heathrow expects more passenger movements and increasing aircraft sizes to drive more capacity, while new direct routes will stimulate additional demand.
On the back of this renewed revenue projection, the airport altered adjusted EBITDA, which is now forecast to total £1.97bn ($2.69bn), down 2.9% on the year prior and an increase of £23 million ($31.4 million) versus the Heathrow’s December investor report, with this primarily driven by higher aeronautical revenue.
Adjusted operating costs are forecast to rise by 7.2% on the prior year to £1.63bn ($2.23bn), an increase of £17 million ($23.2 million) in comparison to projections made in the airport’s December investor report.
These increased costs have been attributed to security requirements demanding more resources, additional service mitigations and higher contractual costs due to National Insurance.