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Heathrow raises passenger forecast amid stronger than expected demand

Heathrow’s traffic outlook for 2022 has been further revised to reflect stronger than expected passenger demand.

A new forecast of 54.4 million passengers is 67% of pre-pandemic 2019 levels.

The 8.96 million increase compared to the airport’s December 2021 guidance of 45.5 million and 52.2 million at first quarter results in April.

The revised projection represents a “significant increase” to 2021 when Covid travel restrictions were in place most of the year. 

“This takes account of the latest short-term outlook in terms of airline schedules, bookings and short-term capping of demand based on capacity,” the London hub said.

“However, the degree of uncertainty is still significant so we continue to consider a range in our forecasts, from a low case of 57% recovery to a high case of 77% recovery against 2019.”

The increased passenger outlook enabled Heathrow to raise its earnings [ebitda] expectations, representing an increase of 257% to £1.37 billion over last year.

Revenue is forecast to grow by 114% to almost £2.6 billion compared to £1.2 billion in 2021, with aeronautical revenue increasing 206% and retail revenue by 213%. 

Operating costs are expected to increase 47% to £1.22 billion “as we continue to invest ahead of the growth and in part driven by steep inflation in utilities costs as a consequence of higher energy prices,” Heathrow said in a new investor report. 

“While we rebuild capacity from the pandemic, resources remain tight, in line with other airports in the UK and Europe. 

“We are working closely with airlines and ground handlers to match supply and demand. 

“This has made the difference at Heathrow in being able to get passengers away over Easter and the Jubilee half term.”

Heathrow is awaiting the final publication by the Civil Aviation Authority of final proposals “imminently” for charges for the next regulatory period.

The airport is seeking to impose higher charges than the figure initially put forward by the aviation regulator.

Heathrow insisted: “Our plan has been carefully crafted over the past two years and less than the equivalent of a 2% increase in ticket prices will enable us to deliver the level of service that passengers want, drive the sector’s recovery and equip the UK with the hub airport it needs to thrive.”   

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