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.
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