Heathrow Airport: 2023 sees a return to profit

A Heathrow Airport ground handler marshals an aircraft.
Photo Credit: Heathrow Airport
Len Varley - Assistant Editor 4 Min Read
4 Min Read

Heathrow Airport witnessed a firm resurgence in 2023, marking a significant milestone in its history. The London airport has seen a return to profit, with the first adjusted profit in four years of £38 million adjusted profit before tax.

Let’s delve into the key highlights that defined Heathrow’s exceptional performance during the year.

Passenger Numbers: A Strong Recovery

The year 2023 saw Heathrow’s passenger numbers rebounding substantially, reaching a commendable 79.2 million.

This resurgence fortified the major London hubs recovery, and also neatly positioned it as a frontrunner among European airports.

Notably, Heathrow clinched the esteemed title of the “Best airport in Europe,” putting the icing on the cake of a solid rebound year.

Financial Performance: Turning the Tide

In a notable turnaround, Heathrow recorded a small adjusted profit for the first time since 2019. Bolstered by a robust performance in Q4, the airport reported £38 million in adjusted profit before tax.

Despite the challenges posed by the pandemic, Heathrow’s balance sheet remained robust, with gearing levels below pre-pandemic standards and substantial liquidity amounting to £3.8 billion.

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However, the reduction in airport charges by 20% in real terms, as per the CAA’s H7 settlement, presented a significant financial hurdle.

This necessitated strategic efficiencies and investment trade-offs to bridge a £400 million gap over the next three years.

Investments for Improvement

Heathrow embarked on a series of strategic investments aimed at enhancing service quality and operational resilience.

Noteworthy initiatives included the upgrading of 146 security lanes as part of a £1 billion investment in next-generation security equipment.

Additionally, the appointment of a lead contractor for the replacement of the Terminal T2 baggage system underscored Heathrow’s commitment to elevating the passenger experience.

A jet flies overhead to land at Heathrow Airport.Heathrow Airport
Photo Credit: Heathrow Airport

Sustainability and Environmental Initiatives

Sustainability remained firmly entrenched in Heathrow’s operational ethos, with significant strides made towards fulfilling its Heathrow 2.0 commitments.

The launch of the Giving Back Programme exemplified Heathrow’s dedication to community engagement, with plans to impact nearly 100,000 local residents positively.

Moreover, Heathrow made significant strides in promoting sustainable aviation by utilizing record amounts of Sustainable Aviation Fuel (SAF) in 2023, with plans to incentivize the use of up to 155,000 tonnes of SAF in 2024.

CEO Heathrow: Advocating for Change

Heathrow’s CEO, Thomas Woldbye, emphasized the critical role of government support in navigating the challenges ahead.

Urging ministers to prioritize the establishment of a domestic Sustainable Aviation Fuel industry, Woldbye underscored the significance of levelling the playing field with European counterparts to bolster international tourism spend.

The upcoming Spring Budget presents a crucial opportunity for policymakers to effect meaningful change and bolster the UK’s aviation sector’s competitiveness.

Photo Credit: Heathrow Airport

Charting the Course Ahead

Reflecting on Heathrow’s achievements in 2023, CEO Thomas Woldbye hailed it as a year of progress amidst adversity, saying:

“2023 was a good year for Heathrow from a challenging start to a great finish – We delivered much improved service for our customers, and managed to turn a small profit after three consecutive years of losses.”

While acknowledging the imperative of delivering improved service to a growing passenger base in 2024, Woldbye highlighted the formidable task of maintaining profitability amidst reduced airport charges.

He emphasized the need for strategic efficiency measures and prudent investment decisions to surmount the financial challenges posed by regulatory mandates.

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Heathrow Airport capped off a year of resurgence and rebound in 2023, showing the first adjusted profit in four years.
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