More losses for Heathrow as chaos engulfs aviation industry

More losses for Heathrow as chaos engulfs aviation industry despite a surge in passenger numbers

Heathrow faces another year of losses despite a surge in passenger numbers, bosses warned.

The west London airport said it will not return to the black or pay dividends for a third year in a row as the pandemic continues to take its toll. Heathrow lost £2billion in 2020 and another £1.8billion in 2021.

The warning of another year in the red came despite a ‘strong’ April that saw it welcome 5million passengers in an Easter travel boom, which caused chaos at airports around the country.

Heathrow airport said it will not return to the black or pay dividends for a third year in a row. Heathrow lost £2bn in 2020 and another £1.8bn in 2021

Heathrow said it now expects to handle 53million passengers this year – up from its earlier forecast of 45.5million. 

However, this remains at just two-thirds of pre-pandemic levels. The surge in demand for air travel has caught the industry by surprise. 

Understaffed airlines have cancelled flights and chaos at unprepared airports has led to huge delays.

Heathrow – Britain’s busiest airport – said it has escaped the worst of the problems with over 95 per cent of passengers getting through security within five minutes. At other airports, queues have lasted for three hours.

Heathrow is recruiting 1,000 security officers and plans to reopen Terminal 4 in July ‘to maintain the service our passengers expect’ over the summer.

Aviation analyst Alex Macheras said: ‘Heathrow is Britain’s only true hub airport, and is desperately trying to recruit, background check, train up, and roster new staff across various areas of the airport as international travel demand surges.’ 

The entire aviation ecosystem is facing difficulties after tens of thousands of skilled staff were made redundant during the Covid-19 pandemic.

A shortage of staff now air travel is picking up has led to cancelled flights, ruining thousands of holidaymakers’ travel plans.

Macheras warned the disruption will continue well into summer, as carriers grapple with the industry’s staff shortage and rising passenger numbers.

Heathrow chief executive John Holland-Kaye said: ‘We all want to see travel get back to pre-pandemic levels as quickly as possible, and while I am encouraged by the rise in passenger numbers, we also have to be realistic.’

The Bank of England’s dire warnings that inflation will rocket to over 10 per cent and the economy will likely slide into recession are expected to hit people’s holiday plans. 

Barclays figures show that people are spending more on their credit cards on essentials but less on retail and eating out, as consumers curb their spending.

The war in Ukraine, higher fuel costs, ongoing travel restrictions in key destinations like the United States and possible new Covid-19 variants are all cited as reasons why Heathrow expects to remain lossmaking.

This is despite the fact that some airlines predict a return to profitability this quarter and expect to resume paying dividends after pushing up fares. Heathrow said in 2020 that it hoped to restart paying dividends in 2022.

The airport is at loggerheads with the Civil Aviation Authority (CAA) over landing fees. It wants to hike the charges to fund investment in the airport. 

Holland-Kaye said: ‘There are significant challenges ahead – the regulator can either plan for them with a robust and adaptable regulatory settlement that delivers for passengers and withstands any shocks, or they can prioritise airline profits by cutting back on passenger service leaving the industry to scramble when things go wrong in future.’

British Airways in shake-up at top 

Cancelled flights: BA has struggled with post-pandemic staff shortages

Cancelled flights: BA has struggled with post-pandemic staff shortages

British Airways has beefed up its top team in an effort to turn its fortunes around during ‘an extremely challenging period’.

Post-pandemic staff shortages and high-profile IT failures have caused widespread disruption including cancelled flights and customers waiting on hold for hours to speak to the airline.

The airline has hired Dirk John as chief digital and transformation officer from consulting firm McKinsey.

 Calum Laming has joined as chief customer officer from Vueling, where he was in charge of transforming the airline’s customer experience. 

Chief operating officer Jason Mahoney will assume the role of chief technical officer.