Heathrow is no longer Europe's biggest airport - Results for the 9 months ended 30th September 2020
View attachment 17389- Keeping people safe remains top priority – we have invested in UK aviation’s most extensive array of COVID-secure technologies. New rapid testing technologies are already helping to open up overseas markets safely
- Demand forecast revised down – Passenger numbers are now forecast to be 22.6m in 2020 and 37.1m in 2021, compared to our June forecast of 29.2m in 2020 and 62.8m in 2021, and 2019 actuals of 81m. The reduction is caused by the second wave of COVID and slow progress on introducing testing by the UK government to reopen borders with “high risk” countries
- UK cedes competitive advantage to European rivals – For the first time, Paris Charles de Gaulle has overtaken Heathrow as Europe’s largest airport, with Amsterdam Schiphol and Frankfurt close behind. All three continental rivals have implemented testing regimes. The UK Government has announced an intention to introduce testing for passengers from high risk countries by 1st December to help restart the UK economy
- Losses widen on significant passenger decline – Heathrow’s losses have widened to £1.5 billion in the first 9 months as passenger numbers in Q3 remained down over 84%. Q3 revenue fell 72% to £239 million and Q3 adjusted EBITDA fell to £37 million
- Safeguarding the future – We acted quickly to reduce our monthly “cash burn” by over 30%, cutting at least £300 million of operating costs and cancelling or pausing over £650 million of capital projects. Further savings are planned, but we are protecting employment, offering all frontline colleagues a job with market-rate salaries guaranteed at or above the London Living Wage
- Heathrow finances remain robust – Liquidity at the end of September has been boosted further in October to £4.5bn. Cash reserves are sufficient for the next 12 months even under an extreme scenario with no revenue, and well into 2023 under our current forecast. Investor confidence remains strong with 94% of creditors agreeing a waiver on financial covenants until the end of 2021. We have maintained our Investment Grade credit rating status
- Seeking a regulatory adjustment, in line with the Q6 settlement – Heathrow is price regulated, with a return set not by the market but by the regulator based on assumptions with limited upside and limited downside. There was an explicit recognition in the Q6 settlement that it can be adjusted in the event of exceptional circumstances, which the CAA agrees has now occurred. We are seeking adjustment, in line with the settlement, which will keep future consumer prices down, incentivise investment to improve service and give a sustainable balance of risk and return
| At or for 9 months ended 30 September | 2019 | 2020 | Change (%) |
| (£m unless otherwise stated) | |||
| Revenue | 2,302 | 951 | (58.7) |
| Cash generated from operations | 1,463 | 215 | (85.3) |
| Loss before tax | (76) | (1,517) | -- |
| Adjusted EBITDA(1) | 1,459 | 259 | (82.2) |
| Adjusted profit / (loss) before tax(2) | 297 | (786) | -- |
| Heathrow (SP) Limited consolidated nominal net debt(3) | 12,412 | 13,082 | 5.4 |
| Heathrow Finance plc consolidated net debt(3) | 14,361 | 15,199 | 5.8 |
| Regulatory Asset Base(4) | 16,598 | 16,472 | (0.8) |
| Passengers (million)(5) | 61.0 | 19.0 | (68.9) |
