London Heathrow airport’s losses from two years of COVID-19 disruption swelled to 3.8 billion pounds ($5.2 billion), leaving its finances hanging on a summer travel rebound and the go-ahead from regulators to raise prices.
The UK hub had a loss of 1.8 billion pounds last year after passenger numbers slumped to 19.4 million, the lowest since 1972, Heathrow said in an earnings statement Wednesday.
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Europe’s busiest airport prior the pandemic, Heathrow was the region’s only major hub to see a further reduction in traffic last year as the long-haul markets in which it specializes remained shackled by travel curbs.
While demand is now headed higher, the omicron variant of the coronavirus hit the recovery at the start of the year, leaving passenger numbers 23 percent behind its forecast.
A strong summer should still propel the tally to a full-year target of 45.5 million, Heathrow said.
Still, with net debt totaling 15.4 billion pounds at the end of last year, including its finance arm, Heathrow is counting on getting regulatory clearance for significant price increases to restore its finances and go ahead with spending on improvements.
The UK Civil Aviation Authority is working to finalize fees that Heathrow can charge airlines for the period running from the summer through 2027, with carriers arguing that the number should be set at a lower rate than Heathrow demands.
“I am anxious that the CAA will undercook the investment needed to avoid the return of ‘Heathrow hassle,’ with longer queues and delays,” Chief Executive Officer John Holland-Kaye said in the release.
Heathrow said it has achieved 870 million pounds in cost savings over the past two years and has 4 billion pounds of liquidity, though is “keeping a close eye on cash flows.”
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