Heathrow’s Strong 2023 Performance: Record Passengers, Profit & Sustainable Growth

Heathrow Airport had a remarkable year in 2023, achieving significant milestones and improvements despite the challenges faced by the aviation industry. The airport’s CEO, Thomas Woldbye, highlighted the accomplishments of the year and the challenges ahead in a statement.

Record Passenger Numbers and Accolades

Heathrow saw a notable recovery in passenger numbers, reaching 79.2 million, the third-highest in its history. The airport outperformed all other European hubs, earning the title of the “best airport in Europe” and claiming the world’s “most connected” hub. It also broke into the top five largest airports globally.

Financial Performance

After three consecutive years of losses, Heathrow recorded a small adjusted profit in 2023. A strong performance in Q4 contributed to £38 million in adjusted profit before tax. Despite the challenging environment, the airport’s balance sheet remains strong, with gearing below pre-pandemic levels and £3.8 billion of liquidity. Airport charges were reduced by 20% in real terms at the start of 2024 in line with the CAA’s H7 settlement, which poses a challenge to maintain profitability in the coming years.

Investments in Service and Resilience

Heathrow is investing in behind-the-scenes improvements to enhance passenger experience and operational resilience. This includes upgrading 146 security lanes as part of a £1 billion investment in next-generation security equipment and replacing the T2 baggage system.

Commitment to Sustainability

Sustainability remains a top priority for Heathrow, with significant progress made towards its Heathrow 2.0 commitments. The airport launched the Giving Back Programme, benefiting nearly 100,000 local people. Record amounts of Sustainable Aviation Fuel (SAF) were used at Heathrow in 2023, including powering the inaugural 100% SAF transatlantic flight. The airport has committed to incentivizing the use of up to 155,000 tonnes of SAF in 2024.

Call for Action in the Spring Budget

CEO Thomas Woldbye called on ministers to use the Spring Budget to support the aviation industry. He emphasized the importance of speeding up the delivery of a domestic SAF industry and leveling the playing field with European rivals to maintain competitiveness.

Woldbye said, “2023 was a good year for Heathrow from a challenging start to a great finish. That’s a great platform to build on, although in 2024, we are expected to deliver even further improved service to more passengers, but with airport charges cut by 20% in real terms. We will have to pull every lever to become more efficient and make tough choices on where we spend and invest our money to overcome the huge cost challenge set by the CAA and remain profitable over the next three years.”

Financial Highlights for the Year Ended December 31, 2023

• Revenue: £3,687 million, up 26.6% from 2022
• Adjusted EBITDA: £2,228 million, up 32.3% from 2022
• Cash generated from operations: £2,092 million, up 21.7% from 2022
• Profit before tax: £701 million, a significant increase from 2022
• Adjusted profit before tax: £38 million, a turnaround from a loss in 2022
• Heathrow (SP) Limited consolidated nominal net debt: £14,795 million
• Heathrow Finance plc consolidated nominal net debt: £16,806 million
• Regulatory Asset Base: £19,804 million
• Passengers: 79.2 million, up 28.6% from 2022