Heathrow warns UK falling behind Europe as losses hit £2.9bn

Heathrow Airport this morning warned that it was falling behind European rivals because of the continuing restrictions on international travel.

The UK’s largest airport said it had racked up losses of £2.9bn over the past six months, as vaccination travel rules and pricey tests continue to hamper the airline industry’s recovery.

Passenger numbers remain a mere fraction of what they were before the pandemic, and cargo trade levels are also lagging behind hubs such as Frankfurt and Schiphol in Amsterdam.

“Britain is losing out on tourism income and trade with key economic partners like the EU and US because Ministers continue to restrict travel for passengers fully vaccinated outside the UK”, the airport said in a statement.

“Trade routes between the EU and the US have recovered to nearly 50 per cent of pre-pandemic levels while the UK remains 92 per cent down.”

Fewer than 4m travellers passed through the airport in the first six months of this year, a level that would have taken just 18 days to reach in 2019, the airline added.

For the year as a whole, it now expects 21.5m passengers to travel through Heathrow, based on pent-up demand for holidays.

Chief executive John Holland-Kaye said that the airport was beginning to fall behind its rivals due to the government’s current travel policy.

“The UK is emerging from the worst effects of the health pandemic, but is falling behind its EU rivals in international trade by being slow to remove restrictions”, he said.

“Replacing PCR tests with lateral flow tests and opening up to EU and US vaccinated travellers at the end of July will start to get Britain’s economic recovery off the ground.”

With the turbulence that has shrouded the industry yet to clear, the London airport has had to undergo strict cost-cutting measures, which has seen liquidity lift by 49 per cent to £4.8bn since the beginning of the pandemic.

The funds will keep Heathrow afloat for now, providing “sufficient cover” to meet its commitments until October 2022 in the “extreme no revenue scenario”, it said.

Revenue hit £348m in the six months to 30 June, down around half in comparison with the £712m revenue in the same period last year.

The airport said that the government’s traffic light system had given travellers more confidence in booking but pricey tests have held back larger families from making the leap.

“Recent changes to the government’s traffic light system are encouraging, but expensive testing requirements and travel restrictions are holding back the UK’s economic recovery and could see Heathrow welcome fewer passengers in 2021 than in 2020.”