Heathrow reiterates third runway case as half year passengers hit record level

Heathrow will reiterate its case to Andy Burnham’s new government for building a third runway as it reported a record of 40 million passengers in the first half of the year.

 

The figure was described as “a testament to the resilience of hub airports in geopolitical headwinds”.

 

The London hub added: “Whilst passenger demand to the Middle East has softened, Heathrow’s network has adapted with significant growth in North America (up 1.6%) and Asia-Pacific (up 7.9%), a 5.4% increase in transfer passengers and nearly a 1% increase in cargo.”

 

Revenue was up by 0.3% to £1.7 billion in the six months to June 30 despite costs rising by 6.4% year on year to £814 million.

 

The increase in costs was largest driven by increased government taxes - business rates and national insurance - and investments in new technology which aims to drive future efficiencies and further improvements to operational performance, the airport noted.

 

First half pre-tax profit more than doubled from £203 million to £447 million while adjusted earnings [ebitda] fell by 4.6% to £915 million.

 

“As a result of high passenger satisfaction scores, strong operational performance and the airport’s robust financial position, shareholders received a £200 million dividend in the period,” Heathrow disclosed.

 

Referring to the third runway plans and government consultation, Heathrow said: “Our privately funded proposal will deliver growth, reinvigorating industrial supply chains including UK steel and creating tens of thousands of apprenticeships and quality jobs spread across the country.

 

“When the third runway is up and running, it will boost trade through Heathrow by 50% and attract millions more visitors and investors to the UK.

 

“By government’s own assessment, the project is expected to deliver 60,000 jobs and £40 billion of economic growth.

 

“That is why the project is widely supported by trade unions and businesses across the country, as well as 68% of local people.

 

“We will respond to the government’s consultation to try to ensure the final policy framework enables us to deliver these benefits at pace.”

 

Heathrow also addressed the Civil Aviation Authority’s continued efforts to “refine” the regulatory model for expansion.

 

The airport said: “Longer-term certainty, smarter incentives and independent expert assurance are key reforms that will enable us to deliver the project with better outcomes for consumers.

 

“Airlines with a significant presence at split operator airports have raised concerns that this model can undermine passenger experience and fail to deliver purported competition benefits, questioning the evidence for why it should be applied to Heathrow.

 

“In order for us to begin delivering the benefits of expansion, including unlocking lower fares for passengers, it’s critical that the CAA keeps up momentum in its decision making on this issue.

 

“We want to unlock early growth and invest in our existing facilities before expansion and are providing additional evidence to the CAA ahead of its next decision in November.”

 

Chief executive Thomas Woldbye said: "Despite geopolitical headwinds, we welcomed a record 40 million passengers in the first half of the year while delivering strong customer service, culminating in passengers ranking Heathrow as one of the best airports in the world. 

 

“Our plan for the future is about much more than just building a third runway - this project is a real opportunity to provide an economic boost to every region and nation of the country. 

 

“It will back British industry by pumping billions of pounds of private investment into our UK supply chain, revitalising the UK’s steel sector as well as creating tens of thousands of new jobs and skilled apprenticeships across the country. 

 

“It will unlock significant new capacity, opening new domestic and international routes, making travel more affordable for passengers and providing a £150bn boost to British trade with markets around the world. For too long, indecision and debate has prevented these benefits from being delivered. 

 

“Over the next several weeks, we’ll be working with the new government to make sure we can deliver these benefits for communities and workers right across the country."