Heathrow prepares for safe restart of travel and trade in 2021 - Results for the year ended 31st Dec 2020
Keeping passengers and colleagues safe – We have only been able to remain open throughout the pandemic by maintaining high safety levels. We helped to develop international standards for safe travel through airports and invested in cutting-edge COVID-secure technologies and testing facilities for up to 25,000 passengers a day to help restore international travel safely.
Annual loss of £2bn underlines the devastating impact of COVID-19 on aviation – Passenger numbers collapsed to 22.1m, more than half of whom travelled in January and February. Overall revenue fell 62% to £1.2bn and adjusted EBITDA fell to £270m. Government policies over recent months have effectively closed borders. We have had no government support, other than furlough, and have not been given relief from business rates, unlike other airports, retail and hospitality businesses. The March Budget is the key opportunity for the Chancellor to support the sector by providing 100% business rates relief, extending the furlough scheme and reversing the tourist tax.
Decisive action to weather the storm – Airports have very high fixed costs. We acted quickly to cut gross operating costs by nearly £400m, reduced capital expenditure by £700m and raised £2.5bn in funding including a £600m capital injection. We ended the year with £3.9bn of liquidity, enough to see us through until 2023.
CAA must act now to unlock lower charges and more investment for consumers – If the CAA acts to approve a RAB adjustment, to recover regulatory depreciation and provide a fair balance of risk and reward, they can unlock lower airport charges and higher investment in passenger service and resilience.
28% decline in cargo volumes shows the cost to the economy of shutting down aviation. Passenger planes from Heathrow are the UK’s global trading network, carrying British exports and inbound supply chain. Economic recovery will be held back until long haul passenger flights are restarted, especially to key markets such as the US.
We support the Prime Minister’s plan to restart travel and the economy – We will work with the Global Travel Taskforce, so that Britain can become the first country in the world to safely restart international travel and trade at scale, saving thousands of jobs and reinvigorating the UK economy. The Prime Minister has a unique opportunity to agree a common international standard for safe travel with other world leaders when he hosts the G7 in June.
Building Back Better – We remain focused on decarbonising aviation. We became carbon neutral in 2020 and have been working to make decarbonizing aviation a flagship goal for COP26 ahead of a global agreement for net zero emissions by 2050 at the ICAO general Assembly in September 2022.
Heathrow expansion is mission critical to delivering “Global Britain” – With the Supreme Court reinstating the Airports National Policy Statement, we will consult with investors, Government, airline customers and regulators on our next steps.
Heathrow CEO John Holland-Kaye said:
“2020 has been one of our most challenging years – but despite £2bn of losses and shrinking to passenger levels we haven’t seen since the 70s, I am hugely proud of the way that our colleagues have kept our passengers safe and the UK’s hub airport open for vital supplies throughout. We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale. Getting aviation moving again will save thousands of jobs and reinvigorate the economy, and Heathrow will be working with the Global Travel Taskforce to develop a robust plan underpinned by science and backed by industry. The Prime Minister will then have the unique opportunity to secure global agreement on a common international standard for travel when he hosts the G7 in June. In the meantime, we need next week’s Budget to support aviation’s recovery by extending furlough and providing 100% business rates relief.”
|At year ended 31 December||2019||2020||Change (%)|
|(£m unless otherwise stated)|
|Cash generated from operations||1,942||(95)||--|
|Profit / (loss) before tax||546||(2,012)||--|
|Adjusted EBITDA(1) (4)||1,921||270||(85.9)|
|Adjusted profit / (loss) before tax(2) (4)||375||(1,214)||--|
|Heathrow (SP) Limited consolidated nominal net debt(3) (4)||12,412||13,131||5.8|
|Heathrow Finance plc consolidated net debt(3) (4)||14,361||15,120||5.3|
|Regulatory Asset Base(5)||16,598||16,492||(0.6)|