Heathrow fears drop in air travel demand this winter after…

heathrow-fears-drop-in-air-travel-demand-this-winter-after…

Heathrow fears drop in air travel demand this winter after…

Heathrow fears drop in air travel demand this winter after summer travel ‘bubble’
2022-04-29 14:38:00
In July 2021, Heathrow had £2.9 billion of losses due to the Covid pandemic. By the end of March 2022, the losses were £4 billion. The total consolidated net debt of Heathrow Finance plc was £15.4 billion in January 2022 and £15.576 in March 2022. Heathrow is hoping for a huge increase in its passenger number this year, compared to last year – though it will still be below the number in 2019. Its 2022 passenger forecast has risen from 45.5 million to 52.8 million, but that is still just 65% of the 2019 pre-pandemic level.  But Heathrow is till expecting to remain in the red in 2022. There is a current bubble of air travel demand, as people want to go abroad after being in the UK during the pandemic. But it seems likely that with the high price of oil, the considerable cost of living increase, lower GDP growth, continuing Covid around the world, and uncertainties with the Ukraine war, demand for flights will fall after the summer.  Heathrow is anticipating a “winter freeze” in demand. It is possible there will be another Covid variant of concern later this year, that could see the return of UK travel restrictions, deterring people from flying. .Tweet   Heathrow results for the 3 months to  31.3.2022 includes these comments: Heathrow will remain lossmaking in 2022 as COVID losses top £4 billion – Despite increased outbound demand, Heathrow is not forecasting a return to profit and dividends in 2022. Although Q1 2022 revenue climbed to £516m and adjusted EBITDA turned positive to reach £273 million, total pandemic losses have now topped £4.0 billion. Heathrow liquidity remains strong with gearing decreasing to pre-pandemic levels Summer travel bubble, but winter freeze on horizon – We are seeing a temporary increase in demand driven by UK outbound leisure passengers taking advantage of removed UK travel restrictions and redeeming travel vouchers accrued during the pandemic.  As a result, we are updating our 2022 passenger forecast from 45.5 million to 52.8 million, which represents a return to 65% of prepandemic traffic this year. However, demand remains very volatile and we expect these passenger numbers to drop off significantly after the summer. We are already seeing airlines cancelling services into the autumn and the realities of higher fuel costs, lower GDP growth, the war in Ukraine and the ongoing pandemic will drag on demand. We are still in a pandemic with many markets still closed, nearly 80% with testing and vaccination requirement

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