Heathrow is finally back in the black and is promising it will carry more passengers than ever before in 2024 following the pandemic, billions of pounds of losses, and a bitter row with its airline customers.
The long haul back from empty terminals during the Covid-19 travel restrictions has finally resulted in Heathrow turning a profit of £38 million in 2023. And the four-terminal, two-runway airport west of London, Europe’s busiest international aviation gateway, says things are ready to take off, forecasting passenger numbers of 81.4 million this year, a record, and ahead of the 79.2 million handled in 2023.
Yet the company remains at a crossroads. With £16.8 billion of debt and no dividends paid for last year or the three preceding years or, as yet, forecast for this, long-suffering shareholders are heading for the exit.
The decision by Ferrovial — the Spanish infrastructure company that led the acquisition of the old listed BAA group two decades ago — to sell down its residual 25 per cent stake last autumn has triggered investors speaking for a further 35 per cent of the company seeking to cash in their shares.
Arcadian, the former AXA fund, and PIF, the Saudi sovereign wealth fund, which together acquired Ferrovial’s stake for £2.3 billion, appear unwilling to pick up all the other 35 per cent stake now on sale from the Canadian investor Caisse de dépôt et placement du Québec, the Singaporean sovereign wealth fund GIC, and the Australian Retirement Trust.
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There have been reports that the impasse may be broken with interest being shown by Mubadala, the Abu Dhabi sovereign wealth fund. Currently Heathrow’s largest shareholder, with 20 per cent, is the sovereign wealth fund of Qatar.
Heathrow revenues increased 26 per cent to £3.68 billion in 2023, with a 31 per cent increase in take-off and landing charges offset by a slower 23 per cent rise in income in the terminals mainly from retail and catering.
“We delivered much-improved service for our customers and managed to turn a small profit after three consecutive years of losses,” said Thomas Woldbye, the former boss of Copenhagen airport who has headed up Heathrow since the autumn after the departure of long-time head John Holland-Kaye.
“That’s a great platform to build on,” he said, but warned of “tough choices on where we spend and invest our money” following a shoot-out with the Civil Aviation Authority which leaves it with lower increases in take-off and landing charge than it demanded. “We will have to pull every lever to become more efficient,” he warned.
