Heathrow Declares Resilient Demand In H1 Results

DALLAS — Heathrow (SP) Ltd, the holding company that owns London-Heathrow Airport (LHR), has announced in its H1 2023 results, that it continues to experience strong growth in its recovery from the woes of the pandemic.

In what was described as, “resilient” demand, the mega-hub saw 37.1 million passengers flow through its four terminals during the first half of this year. This represented a seismic leap of 42% compared to H1 2022. Whilst capacity has not been restored to pre-pandemic levels, this latest total was only 4.3% adrift from the same period in 2019.

Scottish carrier Loganair (LM) added additional routes using slots allocated to former carrier FlyBe, which ceased operations earlier this year. Photo: Heathrow Airports Limited

Strong Recovery

Putting this into context, LHR accommodated more passengers than any other hub airport within Europe and witnessed the biggest rebound in demand when compared to H1 2022. When analysing demand prior to the pandemic, Heathrow’s performance was eclipsed only by Madrid Adolfo Suárez (MAD), which saw H1 2023 results differ by a mere 2.7% compared to the same period in 2019.

Despite thriving demand, the airport nonetheless still posted a £139m (US$178m) loss before tax for the first six months of this year, which had more than halved compared to 12 months ago. In a press release issued by Heathrow (SP) Ltd, it linked its economic performance to an ongoing feud with the Civil Aviation Authority (CAA).

This relates to the CAA capping airport charges at LHR, which the airport owner has appealed. Revenue leaped by a staggering 36% compared to the same period last year and exceeded H1 2019 values by 19%. It was stated that this was attributed to greater aeronautical revenue, due to greater passenger throughput.

With LHR already operating close to full capacity, British Airways (BA) is relying on a third runway to facilitate further expansion from its base at Terminal 5.
Photo: Heathrow Airports Limited

New Routes

This summer sees the London gateway link 225 destinations, with recent additions featuring British Airways (BA) linking Cincinnati/Northern Kentucky International Airport (CVG) and JetBlue (B6) adding an additional daily service to New York JFK (JFK). Additional slots in preparation for a new non-stop link to Lima (LIM) have also been granted to the LATAM brand. Given that LATAM Perú (LP) operates no wide-body aircraft, it is suspected that the new route will be operated by either LATAM Brasil (JJ) or LATAM Chile (LA).

South America was the region that saw the strongest recovery in terms of passenger numbers, with passenger demand reaching 150%, when compared to the same period in 2019.

Of interest is that the demand for leisure travel has seen an uptick of 5 percentage points compared to H1 2019, with business-related travel having dipped by the same margin. Looking ahead, the financial report alludes to an expected slight softening of leisure demand during H2 of this year.

Air Traffic Controllers at LHR manage what is regarded to be the busiest dual-runway airport in the world. Photo: Heathrow Airports Limited

New Leadership

In October, long-serving CEO John Holland-Kaye will step down after being at the helm for nine years and has overseen what has arguably been the toughest period in the airport’s history. He enthusiastically reflected on the past six months as being a resounding success for the hub.

“The summer getaway has got off to a great start, thanks to planning and close collaboration with airlines and their ground handlers. I am immensely proud of what we have achieved as a team in the last nine years, transforming Heathrow into a world-class airport that Britain can be proud of. Heathrow is now a leader in sustainability, with a diverse culture that reflects our local community and can attract the best talent from around the world.”

John Holland-Kaye, CEO Heathrow Airports Limited.

Holland-Kaye’s predecessor will be Thomas Woldbye who takes his new position in October. Woldbye is the current Group CEO at Copenhagen Airports A/S (CPH). It is anticipated that one of the more pressing issues that Woldbye will have to contend with is navigating the contentious issue of a third runway at LHR, plans for which were sidelined due to the slump in demand during the pandemic.

Featured Image: A view from the Control Tower overlooking Terminal 5 at LHR. Photo: Heathrow Airports Limited

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Article source: https://airwaysmag.com/heathrow-resilient-demand-h1-results/

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