Heathrow Airport’s financial troubles continue, as it posted an adjusted pre-tax loss of £139 million for the first half of 2023, despite an increase in passenger numbers. The loss can be attributed to a ruling by the Civil Aviation Authority (CAA), which limits the amount the airport can charge airlines for each passenger. Currently, the airport charges an average maximum of £31.57 per customer, but this will be reduced to £25.43 in 2024. Heathrow is appealing this decision to the Competition and Market Authority.
Despite the loss, Heathrow experienced a significant rebound in passenger traffic, with 37.1 million people passing through the airport in the first half of the year, a 42.1% increase compared to the previous year. All markets saw a surge in passenger numbers, with North America seeing a 50% increase and Europe-bound customers growing by almost a third. Trips to the Asia-Pacific region more than doubled as lockdown restrictions eased and flights to cities like Beijing and Shanghai resumed.
While passenger numbers were up, Heathrow’s retail revenue per passenger declined due to the removal of duty-free shopping and the UK government’s decision to end VAT-free shopping for overseas visitors. This has led to tourists choosing other European destinations for shopping, such as Milan, Paris, and Oslo.
Heathrow’s CEO, John Holland-Kaye, who is set to leave in October, has been among business leaders calling for the repeal of the “tourist tax” that has affected the airport’s revenue. Despite the challenges ahead, the airport is preparing for a busy summer season and has increased staffing to avoid delays and cancellations experienced last year.
Holland-Kaye expressed pride in the team’s accomplishments over the past nine years, transforming Heathrow into a world-class airport. However, he also highlighted the financial pressures facing passengers in the second half of the year, including high inflation and interest rates. Despite these challenges, Heathrow remains hopeful that the summer season will be successful.
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