Heathrow Airport plunges to £2BILLION annual loss

Heathrow nosedived to a £2 billion annual loss after the ‘toughest’ year in the airport’s 75-year history as the pandemic saw passenger numbers crash by 73%.

The airport’s annual financial results, which were released this morning, lay bare the devastating impact the Covid crisis has had on the aviation industry.  

The number of people passing through the west London airport tumbled from 80.9 million in 2019 to 22.1 million last year – a level not seen since the 1970s – and more than half of those travelled before the Covid-19 crisis struck. 

The group’s mammoth loss last year compares with profits of £546 million in 2019. 

Swingeing cuts saw the group slash its management team by about a third and around a quarter of frontline staff take voluntary redundancy.

Beleaguered airports and airlines were dealt another hammer blow by the government’s roadmap which put a clampdown on international until at least May 17 – with experts warning this could be too late to save the ravaged industry.

But in a shot in the arm to holidaymakers, Heathrow boss John Holland-Kaye today suggested it was ‘likely’ that people would be able to go abroad for their summer holidays. 

The Prime Minister’s diktat on Monday warned foreign holidays will not be allowed for at least another 12 weeks with scant detail on how the final decision to open up air travel will be made.  

Heathrow’s losses came despite the group’s move to slash costs by nearly £400 million, reduce spending by £700 million and raise £2.5 billion to help see it through the crisis. 

The airport said it was now preparing for a ‘safe restart of travel’ this year.

But bosses called on Chancellor Rishi Sunak to deliver measures to support the stricken sector in next week’s Budget, making a plea for 100% business rates relief, an extension of the furlough scheme and to revive VAT-free shopping for tourists to the UK.

Chief executive John Holland-Kaye said: ‘2020 has been the toughest year by far in Heathrow’s 75-year history.’

But he added: ‘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.’ 

Speaking on Radio 4’s Today programme, Mr Holland-Kaye said it was likely the industry would take a ‘risk based approach’ like last summer, with pre-departure testing only needed for high risk countries. 

He added: ‘I think we’ll see some countries which are considered low risk – places like Singapore, New Zealand, Australia, which have had very low Covid levels – they would be considered low risk.

‘Then of course there will be high risk countries, maybe quarantine still, certainly testing.  

‘But I think we can start to plan with more confidence for the future I think it’s very likely people will be able to go on their summer holidays so that’s really good news.

‘The aviation sector can start to plan ahead for May 17 to make sure we’ve got the people and the planes in place so that we can not just get people on their summer holidays, but also start to get British businesses moving again.’

But he cautiously added: ‘We have to recognise that we are in an uncertain time, we all hope that this will be the last wave and we’re planning our recovery but of course no one can predict anything with Covid.’

The travel industry has been ravaged by the pandemic, with air passenger numbers plummeting by around 90 per cent by the end of last year.

A raft of new measures in recent weeks, including pre-departure testing, quarantine hotels and the scrapping of ‘travel corridors’, has compounded the crisis and heightened fears for the future of the industry. 

Travel chiefs are concerned it may not be enough to give the sector the time it needs to prepare if holidays are to go ahead in the coming months and to create enough confidence for would-be holiday-makers to book.

They want Mr Johnson to harness the success of the vaccine roll-out and indicate when travel restrictions can be expected to start being lifted.

Mr Holland-Kaye said Heathrow had nearly 4 billion in the bank, ‘enough to keep us going at least through until 2023.’

He added: ‘Aviation has always led the UK economy out of recessions and we’ll be doing that again. 

‘And it’s vital that we do because the same passenger planes that are taking you on your holiday are also carrying UK exports and the supply chain and until we can re-establish those long haul flights all over the world we are not going to be able get the British economy back, working at full speeds and protecting jobs here. 

‘So that’s what we’re focused on.’

Critics have called the decision to wait until May 17 to open up flights a ‘hammer blow’ to the aviation industry, which directly and indirectly supports up to 4million jobs and around 100,000 businesses in the UK.

Gloria Guevara, President & CEO of the World Travel & Tourism Council, based in London, told MailOnline: ‘Delaying the return of international travel until mid-May will come as yet another hammer blow to the already struggling Travel & Tourism sector, which has been battling to survive for the best part of a year.

‘The sector was banking its hopes on a quicker return to international travel, so there will be widespread dismay at this news. Its return is crucial if the UK economy is to recover from the ravages of the pandemic, given the sector generates £200billion to the UK’s GDP’. 

There are also growing calls in the industry for vaccine passports – but there is no mention of them in relation to foreign travel in Mr Johnson’s roadmap. 

But there will be a review of ‘potential uses to enable access to settings’ with ‘Covid status certification’ – with the conclusions published before June 21. 

The Government has said a final decision on when international travel can restart will be made before a review is completed by the Department for Transport after Easter, causing yet more uncertainty for those dreaming of going abroad.

‘The Global Travel Taskforce will report on April 12 with recommendations aimed at facilitating a return to international travel as soon as possible while still managing the risk from imported cases and Variants of Concern. 

Following that, the Government will determine when international travel should resume, which will be no earlier than May 17′, the report says. 

Experts have said that if restrictions run into the summer then it will cost the economy around £18billion with airlines saying they need weeks or even months advance warning to ensure they are ready to start flying again. 

Vaccine passports that would allow foreign holidays are ‘feasible’ but would require set standards across countries, scientists have said.

More data are needed on the effectiveness of Covid vaccines and on the duration of immunity to establish how long a passport might be valid, they added.

A report from the Royal Society called for a ‘broader discussion’ about the document, including the need for legal and ethical standards and data privacy.

Yesterday Mr Johnson was warned that failing to reopen international travel by the summer would blow an £18billion hole in the economy.

The prime minister has been facing growing pressure to include international travel in his roadmap for easing lockdown, due to be published today, Monday.

On Thursday, the bosses of some of Britain’s biggest airlines and package holiday firms urged Mr Johnson to have a ‘can-do’ attitude to reopening travel by summer or face tens of thousands more jobs being destroyed.

And a study by a group of cross-party MPs lays bare the scale of the potential hammer blow if current restrictions continue over the summer months, saying it would be ‘beyond devastating’.

The figures project the hit to inbound tourism, integral to the recovery of shops, bars, restaurants, hotels and tourist destinations, would be at least £7.5billion.

And for outbound travel, which generated around £37.1billion for the UK economy in 2019, the hit would be at least £10.5billion.

The figures, compiled by Parliament’s Future of Aviation group, relate to the potential hit for June, July and August this year.

They are based on the amounts inbound and outbound travel were worth to the UK economy for these months in 2019 and the impact if current historically low passenger numbers continue over the summer. 

But Greek island holidays could be on the cards as soon as May as the country examines opening its borders early.

Greece is looking into whether it can give an early green light to British tourists who have received the vaccine.

The move would break from the rest of the European Union, which is pushing for a united and cautious approach to reopening non-essential travel from outside the bloc.

It comes as Greece has recorded a total of 182,783 Covid-19 cases and 6,343 deaths. Over the previous 24 hours, the country recorded 2,111 new cases and 22 new deaths.

Athens is seeking to boost the country’s vital holiday industry, which has taken a hit due to the Covid-19 pandemic.

The government is considering plans to allow in British visitors who can prove that they have been vaccinated Covid-19 in time for the summer months, according to a report in The Times.

Athens is also putting in plans to ensure that airport staff and hotel employees will receive a vaccine.

The reopening of the country would be in contrast with EU leaders who are expected to say that it is too soon to start lifting restrictions on non-essential travel.

A video call in which EU leaders will gather to warn that infections are still too high to remove travel restrictions is expected to state that the ‘epidemiological situation remains serious, and the new variants pose additional challenges.’