Heathrow Airport slashes outlook for next year’s passenger numbers

London’s Heathrow is no longer Europe’s busiest airport, ceding its long-held crown to Paris during the pandemic and blaming government inaction for its passenger numbers plunging even more than rivals. The COVID-19 continues to crush demand for flying and Heathrow is no longer the busiest airport in Europe.

Heathrow said Paris Charles de Gaulle had overtaken it as Europe’s busiest airport, dealing a blow to Britain’s global trade ambitions as the country’s current relationship with the European Union is due to end in two-months time.

The airport criticised the UK government for being slow to introduce an airport testing regime to replace 14-day quarantine rules, and said the delays were causing additional harm to the economy.

Heathrow also cut its outlook for next year’s passenger numbers saying it now expected 37 million passengers, 41% lower than a June forecast, as tightening coronavirus restrictions crush hopes for a recovery in travel demand.

CEO John Holland-Kaye said Heathrow’s slide down the rankings -- Amsterdam and Frankfurt could also overtake it based on passenger numbers -- should spur the government into action.

“I hope the government will realise that if we sit on our hands then Britain will lose many of the things we take for granted like having the best connected airports in the world,” he said in a telephone interview.

Passenger numbers at Heathrow have plunged, down 84% in the three months ended September, pushing it to a 1.5 billion pound ($1.95 billion) loss over the first nine months of the year.

Britain has said it will announce shorter quarantines based on COVID-19 testing to revitalise travel by the beginning of December, but Holland-Kaye said he was also hopeful that there would also soon be progress with a plan to allow quarantine-free UK-US travel.

“There’s at least a 50-50 chance,” Holland-Kaye said when asked about the chances of this starting by late November.

The plan would allow pre-departure and arrival testing on some London to U.S. routes. The United States is a key market for Heathrow, accounting for 20% of its usual traffic, with London to New York accounting for 5%.

The airport is owned by Spain’s Ferrovial, the Qatar Investment Authority and China Investment Corp, among others. Meanwhile, nearly 200 airports in Europe will face insolvency in the coming months if passenger traffic does not start recovering by the end of the year, Airports body ACI Europe said on Tuesday.

An estimated 193 European hubs are considered “at-risk Airports”, ACI said, adding that they contribute to economic activity that creates 277,000 jobs and 12.4 billion euros ($14.66 billion) of European GDP.

Airports at risk are mainly smaller regional ones with fewer than 5 million travellers each year, where closure would have an outsized impact on local jobs, an ACI spokeswoman told Reuters.

Larger European Airports are also burning through cash at an unsustainable rate, with the top 20 European Airports having added 16 billion euros ($18.91 billion) of debt - equivalent to nearly 60% of their revenues in a normal year, ACI said.

“The figures published today paint a dramatically bleak picture. Eight months into the crisis, all of Europe’s Airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs,” ACI EUROPE director-general Olivier Jankovec said in a statement.

Data from ACI showed passenger traffic at European Airports decreased 73% year-on-year in September, with 172.5 million passengers lost. The total volume of lost passengers since January 2020 is now 1.29 billion.

“As of mid-October, passenger traffic stood at 75% down from the same period last year, reaching an 80% decrease for Airports in the EU/EEA/Switzerland/UK footprint - a clear downward trajectory,” Jankovec’s statement said.

ACI Europe represents over 500 Airports out of a total of 740 Airports in Europe, which have paying passengers.

Separately, the British government has for the first time issued a set of standards for asset managers engaged in the multi-billion pound sustainable investment sector as it looks to bolster its green credentials ahead of the next round of global climate talks.

While a variety of industry standards have emerged over recent years as money flows into funds that better assess environmental, social and governance-related risks, this is the first to be supported by the UK government.

“Transforming our financial system for a greener future is crucial as we build back better from COVID-19 and to meet our legally binding target for net zero carbon emissions by 2050,” said Kwasi Kwarteng, minister of state for business, energy and clean growth.

Reuters