After decades, Heathrow no longer Europe’s busiest airport; now it’s Paris Charles de Gaulle
Heathrow has lost its place as Europe’s busiest airport for the first time after being overtaken by Paris’s Charles de Gaulle. In the 9 months to September, Heathrow had about 18.976 million passengers; Charles de Gaulle had 19.27m; Amsterdam’s Schiphol had 17.6m and Frankfurt had 16.16m, according to Heathrow. Heathrow said it lost £1.5 billion in the first 9 months of 2020. While Heathrow has for decades boasted about being the busiest airport in Europe, it is now trying to put pressure on the government, to relax Covid testing and quarantine restrictions, to allow Heathrow to make money again. Heathrow wants people to be able to avoid 14 days quarantine, on arrival in the UK – at a time when Covid is rising again, rapidly, across Europe and elsewhere. Heathrow makes out that increasing its number of air passengers is for the good of the UK; it often conflates what is good for Heathrow (and some jobs locally) with what is good for the UK. Heathrow’s revenue in the third quarter of the year fell 72% compared with 2019, to £239m. Now, with Covid returning for a second wave, Heathrow anticipates 22.6m passengers in 2020 and 37.1m in 2021, compared to 81m in 2019.
Heathrow overtaken as Europe’s busiest airport by Paris Charles de Gaulle
London airport hits out over Covid testing, with passenger numbers below Paris rival
By Jasper Jolly (The Guardian)
Wed 28 Oct 2020
Heathrow airport has criticised the UK government for ‘slow progress’ in instituting a coronavirus testing regime for passengers in relation to its rivals.
Heathrow has lost its place as Europe’s busiest airport for the first time after being overtaken by Paris’s Charles de Gaulle, the London airport said. [Why would anyone, apart from Heathrow, care? Some macho “my airport’s bigger than yours” contest? Just Heathrow one-upmanship …]
The number of passengers passing through Charles de Gaulle surpassed Heathrow, as losses at the UK airport climbed to £1.5bn in the first nine months of 2020. Heathrow heavily criticised the government for “slow progress” relative to its rivals in instituting a coronavirus testing regime for passengers.
The aviation industry has focused on a rapid testing regime as the best hope for reviving its fortunes until an effective vaccine is widespread.
Heathrow wants the government to commit to testing arriving passengers by 1 December, as well as working with the US on an air bridge trial to allow direct travel by Thanksgiving on 26 November.
“This is the way that we can protect jobs in the UK, as well as protecting people from coronavirus,” said John Holland-Kaye, Heathrow’s chief executive, on BBC radio. “It has to be right thing to do for this country to help with the economic recovery. The government has been slow to get on with this. They really need to get on and make this happen before the beginning of December.”
Heathrow opened its first rapid testing facility last week for passengers travelling from London to Hong Kong but the absence of reliable test facilities for passengers going to or coming from other destinations means many are liable to quarantine periods on arrival in the UK or other countries.
At the end of September, Paris had received 19.27m passengers, edging ahead of Heathrow at 18.97m. Amsterdam’s Schiphol airport had received 17.6m and Frankfurt was at 16.16m, according to figures provided by Heathrow.
Heathrow’s revenue in the third quarter of the year fell 72% compared with 2019, to £239m, and the second wave of the coronavirus pandemic in the UK has further reduced the airport’s forecasts for passenger numbers. It now expects 22.6m passengers in 2020 and 37.1m in 2021, far below the 81m who travelled in 2019. In June, when the pandemic appeared to be under control in the UK, it had forecast 29.2m passengers in 2020 and 62.8m in 2021.
Heathrow said it was an example of the “UK ceding competitive advantage to European rivals”.
Holland-Kaye said: “Britain is falling behind because we’ve been too slow to embrace passenger testing. European leaders acted quicker and now their economies are reaping the benefits.”
A spokeswoman for the Department for Transport said: “Our priority has always been to protect the public and manage the risk of new cases being imported from abroad.
“The government’s global travel taskforce is working at pace, with clinicians, devolved administrations and the travel industry to develop measures as quickly as possible to protect air connectivity and consider how testing could be used to reduce the self-isolation period.”
Heathrow, which traces its history back to a grass runway in 1930, was the busiest airport in the world until 2014, when it was overtaken by Dubai, which took advantage of its position between Europe and Asia.
Although reliable passenger numbers are difficult to come by before the 1970s, it is thought that Heathrow had been Europe’s busiest airport since shortly after the second world war, when the Royal Air Force handed it over to the government to become a civil airport.
Yet while the passenger forecasts suggested that Heathrow’s passenger numbers this year would be the lowest since the early 1970s – with a consequent dramatic decline in carbon emissions – Holland-Kaye said the pandemic showed a third runway was necessary at the airport to rebuild the British economy via connections to faster-growing economies such as China and India.
“If we don’t we will be flying through Paris to get to global markets,” he said. “That is not global Britain: that is little Britain. If the prime minister is serious about his vision for a global Britain, he will need a bigger Heathrow.”
In February the third runway was ruled illegal because ministers did not take into account the government’s commitments to tackle the climate crisis. The broader aviation industry is sceptical that it will ever be built. In May, Willie Walsh, the former chief executive of British Airways’ owner, IAG, said the project was “impossible” because of the pandemic.
Heathrow with £17bn debts wants to raise £1.7bn from higher airport charges
Heathrow’s attempt to increase airport charges by £1.7bn sparked anger recently, and were rejected by its regulator, the CAA. British Airways’ owner IAG said it was “staggered” by the demand, as Heathrow has very rich wealth fund owners, who could help the airport with funding. Heathrow is claiming they are within their rights to ask for the price rise. They say their regulatory framework allows it to pass on “exceptional costs” to airlines, and ultimately customers. Many in the airline industry, which does not want higher costs for its passengers, were surprised and impressed by the CAA decision, against Heathrow. One said: “In the past, the CAA has rolled over. For once they have shown their teeth.” Heathrow is immensely in debt, owing banks and bondholder £17 billion. In September, its passenger number was under 20% of its 2019 level. The cost of its 3rd runway plans (now postponed indefinitely?) could be over £30 billion. It is estimated that Heathrow needs 43 million annual passengers, just to cover its interest bill of around £500m. Heathrow at risk of breaching its banking covenants, which when tested in December, will require it to keep debt below 95% of the regulated value of its assets.
CAA tells Heathrow’s owners to invest more in the company, or risk state takeover
The CAA has warned the foreign funds behind Heathrow that the airport is threatened with nationalisation if they do not inject new money to help it cope with the pandemic. They said that without emergency funding from shareholders including several sovereign wealth funds, Heathrow faces a similar fate to Railtrack, the former FTSE 100 company that collapsed in 2001 with debts of £3.5billion; then taxpayers took back control of the rail network. The CAA has rejected Heathrow’s demand for permission to increase its airline and passenger charges, and the airport has paid out £4 billion in dividends since 2012. It has paid £2.1bn in dividends over just the past 4 years. Heathrow has threatened court action if the CAA does not allow it to set higher charges, which it claims it is entitled to. Heathrow has massive debts, owing over £17 billion to banks and bondholders, but it claims it has enough cash to see it through till 2023. However, it has been handling at best 30% as many passengers in recent months, compared to the same time in 2019. Shareholders “need to be fully aware of the projected liabilities of the companies in which they invest and the performance risks they face”. The CAA is now consulting the industry on its proposed rejection of Heathrow’s call for higher charges.