That didn’t stop Heathrow Airport—the busiest airport in Europe—from announcing a record passenger cap for 2024, operating under the assumption that their own massive financial woes. British Civil Aviation Authority (CAA) recently ordered a 6% cut in the cap on the amount that Heathrow can charge airlines. That decision is now resulting in an approximately 4% reduction in annual revenue. The airport’s significance operational challenge. The cascading impacts of a nearby electrical substation on fire, forcing a nearly 24-hour shutdown of the airport and hundreds of cancelled or diverted flights.
In the first quarter of 2024, Heathrow raked in a staggering £825 million in revenue. It’s a little over 2% more than the same seven months last year. Passenger numbers dipped by 1.6%. The closure in late March significantly affected operations. Heathrow’s revenue increased during the three months ending in March. In response, the CAA ruled to decrease the cap on security charges. This new law finally addresses the need to balance airline profitability by limiting passenger fees.
The airport’s full-year guidance remains optimistic. For 2025, Heathrow expects £3.6 billion in total revenues with £1.95 billion adjusted EBITDA. That’s a positive 2% revenue growth projection for the year, but adjusted EBITDA is projected to shrink by 0.6%. Easter Sunday is much later than normal this year. As such, we anticipate a pretty big move on traffic numbers, especially with the aggressive holiday shopping season now captured in the 2Q.
With the March fire incident, those disruptions were acute. Airlines lost hundreds of millions of dollars from canceled and diverted flights. Two independent investigations are taking place in order to find out why the fire started. Their first findings, due in May, may have information outlining operational vulnerabilities at the airport realigned.
Despite these challenges, Heathrow’s focus remains on improving service and maintaining its status as a leading global air travel hub. The airport’s leadership works to stay ahead of regulatory headwinds. Meanwhile, they are trying to achieve operational excellence while increasing the passenger experience in a competitive landscape.