London’s Heathrow airport said on Tuesday it expects another loss-making year in 2022 as fallout from high inflation, renewed Covid travel restrictions and the Ukraine war hamper aviation sector recovery.
“Heathrow expects to remain loss-making throughout this year,” it said in a statement.
This despite the airport handling five million passengers in April — almost double February’s figure.
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Heathrow increased its passenger forecast for this year to nearly 53 million, up 16 percent on its previous estimate.
While the aviation sector recovers as skies reopen and economies emerge from lockdowns, Heathrow on Tuesday pointed to factors hampering the rebound.
These included last week’s warning from the Bank of England that the UK economy could fall into recession amid a cost-of-living crisis.
“The ongoing war in Ukraine, higher fuel costs, continuing travel restrictions for key markets like the United States and the potential for a further (Covid) variant of concern creates uncertainty going forward,” Heathrow added.
The hub estimated this year’s travel demand to reach 65 percent of pre-Covid levels.
“While I am encouraged by the rise in passenger numbers, we also have to be realistic,” Heathrow CEO John Holland-Kaye said in the trading update.
“There are significant challenges ahead.”
Heathrow narrowed annual losses only slightly last year to £1.8 billion ($2.2 billion, 2.1 billion euros), the airport revealed in February.
“With the cost-of-living crisis, the new era of online business meetings, the war in Ukraine and cost inflation, Heathrow is facing yet another difficult year that will delay its first post-pandemic period of profitability,” noted Victoria Scholar, head of investment at Interactive Investor.
Nevertheless, with passenger demand on the rise, Heathrow announced plans in March to recruit 12,000 staff.