UK’s Heathrow hikes passenger forecast as strong summer shrinks losses

By Eva Mathews

(Reuters) -Britain’s Heathrow Airport raised its 2023 passenger forecast on Thursday and reported a big fall in losses for the first nine months of the year following stronger-than-expected summer demand for travel.

The airport, west of London, said it now expects to handle about 79.3 million passengers this year, compared with an earlier forecast of between 70 million and 78 million.

It has benefited from more flights worldwide amid soaring travel demand as consumers continue to splurge on holidays in the wake of the pandemic, despite a cost-of-living squeeze.

“We have still conservative views around what could be the impact of cost of living in the recovery, but we haven’t seen any material impact from that at least yet,” Chief Financial Officer Javier Echave told Reuters in an interview.

The Asia-Pacific rebound has been a bright spot, given borders only reopened earlier in the year, the airport said.

Heathrow, owned by a consortium including infrastructure group Ferrovial as well as Qatari and Canadian investors, posted an adjusted loss before tax of 19 million pounds ($22.95 million) for the nine months to Sept. 30, compared with a 442 million pound loss in the same period last year.

It struggled with high costs due to labour shortages and operational problems last year, introducing a self-imposed cap of 100,000 daily passenger departures in July 2022.

Echave said Heathrow could return to profit as soon as the end of this year, or early next year, adding it was not currently seeing any material economic impact from the conflict in the Middle East.

The airport expects 2024 passenger traffic will be in line with the pre-pandemic level in 2019, when it reached 81 million.

Last week, a plan by Britain’s aviation regulator (CAA) to cut charges for airlines at Heathrow was given the go-ahead by competition authorities, despite opposition from the airport and its customers.

“While we have a tight settlement from the CAA, we will upgrade the airport for our customers,” new CEO Thomas Woldbye said on Thursday.

($1 = 0.8280 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Subhranshu Sahu and Mark Potter)