Heathrow Airport Holdings’ loss for the first quarter of 2021 mounted as the number of passengers traveling through the airport plunged. It said its economic recovery now depends on when international travel in the UK restarts.
The company’s loss for the first quarter of 2021 was £329m ($459m), down from a £41m loss a year prior, as it catered to 1.7 million passengers. This was a 91% drop when compared to Q1 2019. This brought its total losses since the pandemic began to roughly £2.4bn.
The airport group slashed its passenger forecast for the year to between 13 and 36 million, compared with 81 million in 2019, blaming “continuing uncertainty over government policy”.
"These results show how COVID has devastated the aviation sector and British trade," said CEO John Holland-Kaye.
Cargo volumes were down 23% year-on-year.
Heathrow said UK's summer economic recovery depends on travel restarting from May 17, the earliest date it can happen as per the government’s roadmap to ease lockdown restrictions.
"Restarting international travel from 17 May will help to kickstart the economic recovery, allowing exporters to get their goods to market, as well as reuniting families who have been separated for over a year," said Holland-Kaye.
The group has reduced cash burn by 50% versus Q1 2020 and said “prudent financing action” has increased liquidity by 41% to £4.5bn since the start of the pandemic.
Holland-Kaye added that "by acting early to cut costs and protect cash, we have put ourselves in a strong financial position to weather the storm and are ready to welcome back passengers, while keeping them safe."
The pandemic has hit the travel industry hard. Currently, passengers traveling to the UK from 'red list' countries have to cough up £1,075 to quarantine in a hotel for ten days.
There is a chance travel opens up next month with a traffic light system, where destinations are divided into green, amber and red. Green countries would mean people could return to the UK with no restrictions. Amber ones would likely mean people having to quarantine at home, and red ones would require a 10-day quarantine in a hotel.
Heathrow's results come as consumer group Which? warned that some passengers arriving in the UK are having to extend their quarantine or pay for additional Covid tests as private labs are failing to deliver results on time.
It said this raises concerns about the capacity of the UK’s travel testing system weeks before international travel is set to re-open.