London Heathrow Airport has raised its forecasts for 2023 in terms of passenger traffic and cash flows. The airport said that business travel was almost back to the pre-pandemic level and volumes with Asia were on the rise.
The hub, one of Europe’s biggest, made progress in several areas. It reported positive quarterly results during the peak summer period and predicted that the shock from Covid-19 would be fully recovered next year.
In an interview, Javier Echave, chief financial officer, said that corporate travel accounts for 30% of all traffic. This is close to the third share it had before the health crises. He said that transit with China was leading the recovery in Asia.
Echave stated that “all segments and all geographic areas have bounced back to levels of 2019”. “We are in the last decimal places. We’re pretty close to our best.”
The new forecast for 2023 is 79.3 millions passengers, compared to the previous target of between 74 and 78 million. Heathrow handled a record-breaking 80.9 million passengers in 2019.
The airport’s forecast of adjusted Ebitda for 2023 has been raised by 12%, to £2.2 billion ($2.7billion). Heathrow is expected to benefit from the increased cash flow, which includes £14.7 billion of nominal net debt. As of September 30, its average cost of borrowing averaged 10.35%, including index-linked accrual.
Heathrow is still close to breaking even for the first nine-month period of 2023, despite the 19 million-pound adjusted loss before taxes.
Echave stated that he is “very eager” to reinstate dividends that were suspended during pandemic. To do so, the airport would have to meet cost and investment guidelines established by the regulator and return Heathrow’s financial position to health, Echave said.
The company has stated that it does not expect to pay a dividend in 2023.