London Heathrow has announced that it is no longer Europe's biggest airport, with results for the nine months ending September 30 2020, showing passenger numbers are now forecast to be 22.6m in 2020 and 37.1m in 2021, compared to its June forecast of 29.2m in 2020 and 62.8m in 2021, and 2019 actuals of 81m.
“For the first time, Paris Charles de Gaulle has overtaken Heathrow as Europe’s largest airport, with Amsterdam Schiphol and Frankfurt close behind. All three continental rivals have implemented testing regimes. The UK Government has announced an intention to introduce testing for passengers from high risk countries by December 1 to help restart the UK economy.”
Heathrow’s losses have widened to £1.5 billion in the first nine months of the year as passenger numbers in Q3 remained down over 84%. Q3 revenue fell 72% to £239 million and Q3 adjusted EBITDA fell to £37 million.
The airport insists it “acted quickly” to reduce its monthly cash burn by over 30%, cutting at least £300 million of operating costs and cancelling or pausing over £650 million of capital projects. Further savings are planned, says the airport.
Liquidity at the end of September was boosted further in October to £4.5bn. Cash reserves are sufficient for the next 12 months even under an extreme scenario with no revenue, and well into 2023 under our current forecast. Investor confidence remains strong with 94% of creditors agreeing a waiver on financial covenants until the end of 2021. We have maintained our Investment Grade credit rating status
Heathrow has requested a pricing adjustment, which it says will “keep future consumer prices down, incentivise investment to improve service and give a sustainable balance of risk and return”.
The move caused consternation with British Airways new chief executive, Sean Doyle, who has urged the regulator to block the airport’s attempt to increase its landing fees.
At the start 2020 the fee stood at £22.64 per passenger, and the regulator said this month that Heathrow had failed to make a convincing case to increase the expected level of the charge in 2022 by 5% because of losses stemming from the pandemic.
“We would urge the regulator to stick to its position,” said Doyle.
Luis Gallego, IAG chief executive, said Heathrow’s proposal to increase landing fees “does not make any sense”.
