Heathrow today raised its annual profit projections upwards on the back of increased passenger numbers.

A new investor report indicates that adjusted earnings [EBITDA] will hit £1.735 billion for the year to December 31, up from £1.660 billion forecast six months ago and 3.5% on the 2016 result.

The increase is primarily driven by a revised traffic forecast for the year of 76.7 million passengers compared to 75.7 million in the London hub’s previous investor report and “significant growth” in retail income.

Retail income per passenger is also forecast to increase 5.2% to £8.50.

Heathrow traffic rose by 4.3% to 30.4 million in the five months to May 31, with long-haul up by 4.9%, helped by larger aircraft to the Middle East and more people flying to the Asia Pacific region.

European traffic was also “robust” with notable growth on routes to Italy, Portugal, Belgium and Denmark and domestic carryings boosted by the introduction of Flybe services to Scotland in March.

The report said: “In addition to more resilient macro-economic factors, there are increasing signs that UK inbound demand, influenced by the depreciation of sterling, is driving growth.

“Heathrow remains on track to deliver its ambitious cost optimisation plans for 2017 while welcoming a record number of passengers and providing better service and operational standards.”

Regarding plans for a third runway, the airport expects initial public consultation to take place later this year with a final airports national police statement expected to be submitted to a vote in Parliament during 2018.

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Heathrow’s 2016 profits rise by 20%