Heathrow airport has reported a 2.7 per cent increase in revenue for 2017, but pre-tax profits took an 18.7 per cent hit.
The airport announced last month that it saw a record 78 million passengers in 2017, which led to growth in revenue to nearly £2.9 billion. However, pre-tax profit plummeted to £217 million, down from £267 million in 2016.
Heathrow’s financial results were released as CEO John Holland-Kaye released a warning that the UK is falling behind its European counterparts. “While we’re squeezing out small bits of growth, our rivals in France and Germany are overtaking us – for Britain to thrive post-Brexit, the government needs to crack on with Heathrow expansion as quickly as possible with a vote in Parliament before the summer.”
Holland-Kaye has also hit back at airlines’ calls for a guarantee that passengers won’t be faced with higher airport charges in order to pay for the new runway, saying Heathrow is looking out for passengers, according to the Guardian. He claimed an expanded airport would deliver more airline capacity and competition, which will “bring fares down”.
In a letter to the press, Heathrow chairman Lord Paul Deighton said: “We will deliver this project while keeping airline charges as close to current levels as possible... We will not renege on these commitments no matter what the pressure to reduce costs or amend our plans in favour of one vested interest or another.”
However, Holland-Kaye admitted it’s “way too early” to say whether the third runway can be delivered at the £14.3 billion budget Heathrow set in its latest proposal. “Look at the mess Carillion found themselves in by guaranteeing fixed costs they couldn’t deliver... We said we’ll keep costs close to current levels; that’s a fantastic offer.”
Meanwhile, Heathrow Hub, an alternative expansion proposal for extending one of the airport’s current runways instead of building a new one, said Heathrow’s dividend pay-out of £1.1 billion (up from £596 million in 2016) was only able to happen because it “continues to raise passenger charges under the pricing regime regulated by the Civil Aviation Authority”.
Heathrow Hub claims the airport’s proposal would require passenger charges to rise from the current £20 to £28-£30, while International Airlines Group believes it could go as high as £40.