London’s Heathrow airport has recorded a net annual loss of £2 billion in 2020, underlining the devastating impact of the coronavirus pandemic on the aviation sector.

This is as 2020, which has been identified as one of Heathrow’s most challenging years has record passengers’ level not seen since the 1970s.

This disclosure is contained in a public statement seen on the company’s website and seen by Nairametrics.

The company said that the number of passengers dropped to 22.1m, more than half of the numbers that travelled in January and February.  It pointed out that the overall revenue fell 62% to £1.2bn and adjusted earnings before interest taxes depreciation and amortization (EBITDA) fell to £270m.

The company said in order to weather the storm, realizing that airports have very high fixed costs, it acted quickly to cut gross operating costs by nearly £400m, reduced capital expenditure by £700m and raised £2.5bn in funding including a £600m capital injection. The firm ended the year with £3.9bn of liquidity, enough to see us through until 2023.

The airport which is one of the busiest in the world reported a 28% decline in cargo volumes, showing the cost to the economy of shutting down aviation.

Passenger planes from Heathrow are the UK’s global trading network, carrying British exports and inbound supply chain. Economic recovery will be held back until long haul passenger flights are restarted, especially to key markets such as the US

The Chief Executive Officer of Heathrow, John Holland-Kaye said, “We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale. Getting aviation moving again will save thousands of jobs and reinvigorate the economy.”

He also said, “2020 has been one of our most challenging years – but despite £2bn of losses and shrinking to passenger levels we haven’t seen since the 70s, I am hugely proud of the way that our colleagues have kept our passengers safe and the UK’s hub airport open for vital supplies throughout. We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale.

‘’Getting aviation moving again will save thousands of jobs and reinvigorate the economy, and Heathrow will be working with the Global Travel Taskforce to develop a robust plan underpinned by science and backed by industry. The Prime Minister will then have the unique opportunity to secure a global agreement on a common international standard for travel when he hosts the G7 in June. In the meantime, we need next week’s Budget to support aviation’s recovery by extending furlough and providing 100% business rates relief.”

What you should know

• The United Kingdom is one of the countries most affected by the coronavirus pandemic, with the aviation sector one of the most affected due to the lockdown.
• The International Air Transport Association (IATA) had called for urgent government assistance and warned that airlines would lose $252bn (£215bn) in revenues in 2020, more than double its earlier worst-case forecast.

The International Air Transport Association (IATA) is expecting that its digital Covid Travel Pass will be ready for roll-out in a matter of weeks.

The pass is an app that verifies a passenger has had the Covid-19 tests or vaccines required to enter a country.

This was disclosed by Vinoop Goel, IATA’s regional director of airports and external relations who said,

“The key issue is one of confidence. Passengers need to be confident that the testing they’ve taken is accurate and will allow them to enter the country.

“And then governments need to have the confidence that the tests that the passengers claim to have are one which is accurate and meets their own conditions.

“We are currently working with a number of airlines worldwide and learning from these pilots. And the plan is to go live in March.

“So basically we expect to have a fully functional working system over the next few weeks.

“We do have a case in the Republic of Korea that does require a paper certificate, so we are working with the government there to ensure they will allow digital certificates to be accepted.”

What you should know

• According to IATA, the Travel Pass is designed in a “modular” way, so that it can work with other digital solutions that are being trialed around the world.
• The App will be available on iOS and Android platforms and to be free to passengers.
• Singapore Airlines was the first airline to start trials of the travel pass in December.
• Etihad, Emirates, Qatar Airways, Air New Zealand are among the other airlines currently conducting trials, and IATA says it is discussing the pass with most airlines throughout the Asia Pacific region.
• It is to be noted that the closest paper equivalent to the app is the Yellow Card, a World Health Organization document which confirms passengers have been vaccinated.
• The airline industry plummeted nearly 70% in 2020 compared to 2019, as Covid dealt a serious blow on the operators and the industry.

Why this matters

The pass is being seen as essential for reopening air travel, as many countries still have strict restrictions or quarantines in place.

An app has become quite essential considering the high level of risk of fraud associated with paper certificates.

According to BBC News report, “Europol recently revealed that a forgery ring in France had been selling negative test results to passengers at Charles de Gaulle Airport and fraudsters had also been apprehended in the UK for selling forged results”.

In many other countries, there have been large-scale frauds of forging negative results for passengers, with several law enforcement officers indicted in the acts.

The industry is hoping for a recovery in 2021, but it’s unlikely that the vaccine rollout will solve the problem immediately, which is part of the reason IATA thinks the Travel Pass is needed.