Gwyn Topham
Transport correspondent
Heathrow has returned to profit with record passenger numbers forecast for 2024, as the airport’s new CEO signalled that the controversial third runway remains firmly in its plans.
The London hub reported an adjusted pre-tax profit of £38m for 2023, its first year out of the red since the start of the pandemic, after losses of £684m in 2022.
Annual passenger numbers recovered to 79.1 million, and through fuller and bigger planes Heathrow expects to beat 2019’s record with 81.4 million coming in this year.
Chief executive Thomas Woldbye, who took over in October, said he would publish reviewed expansion plans for Heathrow in the coming months.
While the runway had dropped down the agenda during Covid-19, after waning political support and legal challenges, Woldbye said: “That is clearly part of our strategy and we need to make sure we get that decision right. And the work going on right now is to analyse all the relevant facts of that project and make sure that, as we proceed towards the decision, we make sure we get the way there right.”
He said the strategy would also address the “years before we get to a third runway, how can we create additional capacity at Heathrow within the existing boundaries?”
But Woldbye said the third runway, which has been approved, cancelled and approved again by successive governments in the past 15 years, would happen eventually: “Clearly the demand is there as we look at it right now. So we have to find the right way to scope that project, yes.”
He said planning was unaffected by the changes of ownership, as new foreign investors circle Heathrow. Ferrovial’s sale of its 25% holding to the Saudi Public Investment Fund and private equity investor Ardian has triggered further potential sell-offs from other shareholders. Abu Dhabi is in talks to become the third Gulf state, alongside Qatar, to take a stake, according to reports from Bloomberg.
Woldbye said that the 2023 results and return to profit were a strong platform, “not only financially but, quite as importantly, [for] the whole building back from post-Covid and from 2022”, when operations were hampered and disrupted by labour shortages and the airport was forced to limit flights.
He added: “We have high customer satisfaction and a lot of our KPIs are back to where they were in 2019, in terms of punctuality, waiting time at security and so on.”
However, he said that there would be a “huge cost challenge” for Heathrow to turn a profit again after the 20% cut in landing charges set by the Civil Aviation Authority. “We’re talking £400m pounds over the period. This is a hard piece of work to be honest … The challenge is to make sure that we keep our passenger offerings at the same level if we at all can.”
Woldbye said Heathrow was no longer “challenged by finding new colleagues” but with around half of staff hired since the pandemic, “we clearly have an experience gap that we have to overcome.”
The CEO indicated he may jettison one of his predecessor John Holland-Kaye’s more eccentric “strategic priorities”, his so-called Mojo initiative on workplace culture: “We’ll definitely keep a people element in our strategy, and we’ll find a proper name for that, whether old or new. There’s a time for everything … we went through Covid, different thoughts, different measures, and now we’re back to more normal operation.”
• This article was amended on 22 February 2024. The subheading on an earlier version said that Heathrow had a pre-tax profit of £38bn for 2023; this should have said £38m.
