Heathrow H1 2021 Financial Results

Heathrow's cumulative losses from COVID-19 have grown to £2.9bn.  

Financing remains resilient, in spite of growing losses – We have taken decisive management action to protect jobs and the financial resilience of the business reducing cash burn by over 50% versus H1 2019, with a 35% reduction in operating costs and a 77% cut in capex. Prudent financing action has increased liquidity by 49% to £4.8 billion since the start of the pandemic, providing sufficient cover to meet all commitments until October 2022 in the extreme no revenue scenario. With continued travel restrictions causing some uncertainty over passenger numbers, we have taken the prudent step to seek creditor approval to waive the Heathrow Finance ICR covenant for FY 2021.

Rebuilding passenger confidence through safe journeys – We have invested in the latest COVID-19 secure technologies and process to achieve the Skytrax 4* rating, the highest achieved by a UK airport. We continue to mandate face coverings in the airport and encourage social distancing to protect passengers and colleagues and rebuild confidence in travel.

Passenger demand increasing from historic lows, but travel restrictions remain a barrier – Fewer than 4 million people travelled through Heathrow in the first six months of 2021, a level that would have taken just 18 days to reach in 2019. Recent changes to the Government’s traffic light system are encouraging, but expensive testing requirements and travel restrictions are holding back the UK’s economic recovery and could see Heathrow welcome fewer passengers in 2021 than in 2020.

UK falling further behind as European competitors seize economic advantage – Cargo volume at Heathrow, Britain’s biggest port, remains 18% down on pre-pandemic levels, while Frankfurt and Schiphol are up by 9%. Britain is losing out on tourism income and trade with key economic partners like the EU and US because Ministers continue to restrict travel for passengers fully vaccinated outside the UK. Trade routes between the EU and the US have recovered to nearly 50% of pre-pandemic levels while the UK remains 92% down.

Financial support should be in place as long as restrictions remain on travel – Travel is now the only sector still facing restrictions, and for as long as it does, Ministers should provide financial support including an extension to the furlough scheme and business rates relief. Heathrow pays nearly £120 million a year in rates, in spite of being loss making; the government is changing policy to prevent us from reclaiming overpayments and we are challenging this in the High Court.

UK Government is showing global leadership with its transport decarbonisation plan – We welcome the UK government’s jet zero aviation strategy, which shows that growth in aviation is compatible with achieving net zero emissions by 2050. We also welcome the proposed mandate for progressively increasing use of Sustainable Aviation Fuel (SAF); together with a SAF price stability mechanism this can stimulate a massive increase in production of SAF, creating jobs across the UK.

Heathrow airlines are taking a lead on decarbonising aviation – Heathrow’s airlines have already committed to using a higher level of SAF by 2030 than in the Committee on Climate Change’s most optimistic case. We recently received our first shipment of SAF, an important proof of concept for blending SAF with kerosene at a major global hub airport. 

Heathrow CEO John Holland-Kaye said: 

"The UK is emerging from the worst effects of the health pandemic, but is falling behind its EU rivals in international trade by being slow to remove restrictions. Replacing PCR tests with lateral flow tests and opening up to EU and US vaccinated travellers at the end of July will start to get Britain’s economic recovery off the ground."