The number of passengers travelling through Heathrow airport fell to 19.4 million in 2021, its lowest level for nearly 50 years, the airport has said as it reported a pre-tax loss of £1.8bn.
Heathrow said it would need to charge airlines more for urgent investment with fewer passengers, despite predicting numbers would double this year with summer getaways.
Cumulative losses during the pandemic have reached £3.8bn, as international travel was disrupted by travel restrictions, and Covid testing and quarantine requirements. The airport said it was the only European hub to see a reduction in traffic last year, falling to levels last seen in 1972, which it blamed on tighter restrictions in the UK than in EU countries. Cargo, which was mainly carried on passenger planes, was 12% lower than pre-pandemic levels.
Heathrow had a weaker start to the year than anticipated, but expects about 80% of normal summer holiday departures, doubling annual numbers to 45m in 2022.
Heathrow plans to reopen Terminal 4 by July, as the removal of Covid testing requirements has increased demand among UK customers, although inbound travel remains suppressed as a result of Covid measures in other countries.
The airports’s chief executive, John Holland-Kaye, described 2021 as “the worst year in Heathrow’s history”, but added: “Demand is now starting to recover and we are working closely with airlines to scale-up our operations.”
Increased charges to airlines will mean air fares could typically rise by just under 2%, Heathrow said.
Holland-Kaye defended the steep hikes as necessary to cover costs with fewer passengers travelling, but said it could be “a short-term issue”, with a possible risk-share settlement under consideration by the regulator, the CAA.
He said the CAA should ensure the airport was paid enough to enable urgent investment, including an upgrade to screening equipment under government directive. The airport also needed to replace the 50-year-old baggage system in Terminal 2, he said: “We can only maintain it by buying spare parts on eBay.”
Holland-Kaye said he rejected the label of “ghost flights” on the almost 5,000 planes that left Heathrow during the pandemic with fewer than 10% of normal passenger number onboard. He said no planes had operated simply to maintain slots, and most had flown for cargo, including the export of Scottish salmon and the import of PPE for use in hospitals.
“They definitely weren’t ghost flights. Because there are not enough cargo planes in the world, a lot of airlines have repurposed their passenger planes,” he said. “When American passengers were allowed to fly but no one was allowed to travel into the US, you might have a few people at the top in the passenger cabin, but cargo was paying for the plane. For UK exports and bringing in PPE, that was exactly what was needed.
“If you had a flight from China bringing in PPE, there may have been no one going out but we definitely needed that flight coming back again.”
While European carriers have argued that restoring “use-it-or-lose-it” slot rules could mean unnecessary flying, Holland-Kaye said that the UK’s reimposition of the 70-30 rule this summer, which allows airlines to retain rights to slots if used 70% of the time, was “a good balance”.
Despite the huge drop in passenger numbers last year, the Heathrow boss said expansion plans remained on the table: “We’re still committed to the third runway. What we’ve seen over Covid is the importance of the hub, the pent-up demand, and the strategic importance of controlling the UK supply chain. Otherwise we become more depend on Schiphol and Charles de Gaulle, both of which were cut off from the UK at times last year, and that’s not sustainable.”
Paul Beckford, coordinator of the anti-expansion group HACAN, said plans for a third runway were “nothing but an economic fantasy”, adding: “It is time that local communities are given permanent reprieve from the threat of destruction, increased noise, more air pollution and net zero-busting carbon emissions.”
