Losses mount at Heathrow as airport warns demand may not recover 'for years'

About 18 million people passed through the airport over the summer, making it Europe's busiest hub

Long queues, cancellations and luggage problems have plagued Heathrow Airport since the travel sector’s comeback from coronavirus restrictions. Bloomberg

The airport has struggled to cope with a volume of more than 100,000 departing passengers a day, with bags arriving late, queues snaking through terminals and flights being cancelled at the 11th hour. Reuters

Travelling through Heathrow has been a dire experience for some of late. AP

Suitcases uncollected at Heathrow's Terminal 3 baggage reclaim. AFP

There is a shortage of staff after many people were laid off during the pandemic. AP

Heathrow rejects the accusation of having failed to prepare, saying it started recruiting extra staff last November. AP

Baggage piles up outside Terminal 2 at Heathrow in June. Baggage issues have bedevilled the airport, with a combination of staff shortages and malfunctioning automated baggage handling systems contributing to the mayhem. Reuters

One traveller shows his disappointment while waiting in a long queue to pass through a security check in June. Getty Images

Passengers queue to check in at Terminal 5. Bloomberg

A queue snakes through the airport. Getty Images

A waiting passenger decides to get some sleep in Terminal 5. Reuters

Long queues form through a terminal. PA

A crowded check in area in Terminal 2 in April. Heathrow rejects the accusation of having failed to prepare, saying it started recruiting months ago. PA

A dejected looking passenger queues for check-in ahead of the Easter Bank Holiday weekend at Heathrow in April. Reuters

People queuing to go through security at Heathrow. PA

Queues at arrivals in Heathrow in March. Photo: Sven Kili / Twitter

Heathrow's losses have widened, despite an improvement in passenger numbers, as the London airport warned demand may not recover “for a number of years”.

About 18 million people passed through Heathrow this summer, making it the busiest hub in Europe over the period.

The airport predicts passenger numbers this year will reach 60 to 62 million, about 25 per cent less than in 2019.

“Headwinds of a global economic crisis, war in Ukraine and the impact of Covid-19 mean we are unlikely to return to pre-pandemic demand for a number of years, except at peak times,” it said in a statement.

The airport's underlying losses increased to £442 million ($503m) in the year to date “as regulated income fails to cover costs, adding to the £4 billion in the prior two years”, it said.

“We have acted responsibly in the face of an uncertain market to protect liquidity and cash flow and reduced gearing. We are not forecasting any dividends this year,” it added.

Heathrow is preparing to lift a passenger cap imposed in July to limit the number travelling to 100,000 per day amid staff shortages.

It will be removed on October 30.

Decades of flight: Heathrow through the years - in pictures

“We are working with airlines to agree a highly targeted mechanism that, if needed, would align supply and demand on a small number of peak days in the lead up to Christmas,” said the airport.

“This would encourage demand into less busy periods, protecting the heavier peaks, and avoiding flight cancellations due to resource pressures.”

The airport said it also aims to build back its ecosystem to meet demand at peak periods.

"To do so, businesses across the airport need to recruit and train up to 25,000 security cleared people - a huge logistical challenge," it said.

"We are supporting, including establishing a recruitment taskforce to help fill vacancies, working closely with the government on a review of airline ground handling and appointing a senior operational executive to invest in joint working."

Heathrow’s chief executive John Holland-Kaye said the hub can be proud of ensuring 18 million people passed through the airport over the summer, with the “vast majority experiencing good service”.

“We have lifted the summer cap and are working with airlines and their ground handlers to get back to full capacity at peak times as soon as possible,” he said.

“As we look to the future, we encourage the [Civil Aviation Authority] to think again at stimulating the long-term investment that will deliver the smooth and predictable journeys consumers value most, rather than focusing on short-term pricing which we have seen only benefits airline profits.”

The airport, which was once the world’s busiest before it was overtaken by Dubai International Airport, is currently operating at about 80 per cent of capacity compared with 2019, before the onset of the Covid-19 pandemic.