London's Heathrow airport turns first profit since the pandemic
London’s Heathrow airport will decide on plans for a controversial third runway in coming months as it looks to grow passenger numbers, after returning to profit in 2023.
Chief Executive Officer Thomas Woldbye is finalizing a refreshed business strategy for the hub that will include short-term measures to expand as well as longer term projects such as the long-delayed new runway.
“Its not an easy project to manage,” Woldbye, who took over as CEO in October, said in an interview Wednesday. “There is also the question of what do we do with capacity at Heathrow until we get to the third runway, because no matter what, the third runway is some years out.”
Heathrow’s longstanding push to add a third runway has yet to advance from its planning phase, amid legal challenges from local residents as well as environmental campaigners. In 2020 — at the height of the Covid-19 pandemic — the UK’s Supreme Court ruled in favor of the project, allowing it to go ahead.
Heathrow reported an adjusted profit of £38 million ($47.9 million) in 2023, its first since the pandemic. The airport operator said that while no dividend is yet planned for this year, “it is plausible subject to financial performance.”
The return to profitability comes at a pivotal moment for the airport, which faces a change to its ownership structure which could hand majority control to the Gulf states. In November, Spanish infrastructure company Ferrovial SE agreed to sell its 25% stake to Saudi Arabia’s Public Investment Fund and French private equity firm Ardian, with shareholders accounting for a further 35% of Heathrow’s capital joining the stake sale via so-called tag along rights.
With the need for other investors to take the additional stake, Abu Dhabi’s Mubadala Investment Co. is now considering buying into the airport, Bloomberg reported Tuesday. It would join PIF and the Qatar Investment Authority as prominent shareholders in the London hub.
Woldbye’s predecessor John Holland-Kaye had a tense relationship with some of the world’s biggest airlines as Heathrow struggled to cope with the ramp up in demand as the pandemic restrictions ended. They also clashed over charges, which are among the highest globally.
The new CEO said he is working to mend those ties and things were “so far so good.”
“The interests of airports and airlines are aligned in 90-95% of what we do,” he said. “My focus is really making sure that as an airport, we provide value for the money that we charge.”
