Heathrow Airport has endured a harrowing 12 months as the UK experienced a slump in international flights to just over 400,000 a year, almost a million down on 2019. Cirium, a UK-based consultancy, said on Wednesday that during the slump Britain's busiest route was Heathrow to New York's John F. Kennedy International Airport, even though UK citizens were banned from the US until November and American residents were only able to resume outbound flights in July. The resumption of the London to New York route was a lone bright spot as almost four in five Heathrow travellers were absent during the year. Overall, short-haul flights dominated UK air travel. Ryanair and easyJet, which rely on Heathrow's rival airports, ranked as first and second carriers with 100,000 and 82,000 flights respectively. The plummeting passenger numbers caused Heathrow's revenue to nosedive, forcing its management into behind-the-scenes negotiations in the hope of raising passenger charges by up to 120 per cent to regain ground. Earlier this month, the UK's Civil Aviation Authority rejected Heathrow’s proposed figure and instead said £30.19 ($40.5) would be the cap on the price for each traveller from next year – an<a href="https://www.thenationalnews.com/world/uk-news/2021/12/16/passenger-charges-at-londons-heathrow-airport-set-to-jump-by-over-50/" target="_blank"> increase of 54 per cent from the current charge of £19.60.</a> While airlines vehemently criticised the increase in landing fees and threatened to pull planes from runways, Heathrow bosses said the new price would not be enough to fund the investment needed improve passenger services in the foreseeable future. In September, Heathrow fell back to tenth place in the ranking of Europe’s busiest airports, having been the most-used aviation hub on the continent in 2019. From January to the end of November, more than 16.3 million passengers passed through Heathrow – a 78 per cent lower figure than the same period in 2019 when 74.2 million people used the airport. The highest recording so far this year was in November when the airport served just over three million travellers. But the onset of more travel restrictions and the return of mandatory testing have thwarted the airport’s bid for a speedy recovery. In November, the <a href="https://www.thenationalnews.com/world/uk-news/2021/12/01/heathrow-airports-terminal-4-reopens-for-red-list-arrivals/" target="_blank">UK government announced it would bring back its red list owing to the emergence of the Omicron coronavirus variant</a>. The measure meant that all arrivals from 11 African red-list countries had to go into quarantine at a hotel for 10 days upon arrival. Although <a href="https://www.thenationalnews.com/world/uk-news/2021/12/15/red-list-scrapped-travellers-permitted-to-leave-uk-hotel-quarantine-early-after-u-turn/" target="_blank">the list has since been scrapped</a>, the spread of the Omicron variant in Britain, coupled with health warnings from scientists, have led to people cancelling their travel plans for the Christmas and New Year period. Heathrow said it had experienced a “high level of cancellations by business travellers concerned about being trapped overseas because of pre-departure testing” which it argued laid bare the “potential harm to the economy of travel restrictions”. In July, Heathrow said its total losses since the beginning of the coronavirus crisis had reached £2.9 billion. <a href="https://www.thenationalnews.com/world/uk-news/2021/11/08/us-bound-flights-perform-dual-take-off-from-london-heathrow/" target="_blank">The US reopened its doors to fully vaccinated travellers from Britain in November</a> – three months after the UK began welcoming vaccinated Americans for quarantine-free travel. US President Joe Biden's administration delayed reciprocating, which caused further suffering for Heathrow. Before the pandemic took hold, London to New York was one of the world’s busiest aviation routes, with about 30 flights a day shuttling across the Atlantic between the two major hubs. It was also a highly profitable route compared to others, owing to high demand from business travellers. In the year to April 2019, British Airways alone made more than £710 million from the route. The UK’s soaring number of Covid-19 cases recently prompted France and Germany to impose travel bans on most travellers from Britain. The restrictions placed further strain on the UK’s travel industry which had been hoping for a busy festive season. The <a href="https://www.thenationalnews.com/world/uk-news/2021/11/22/british-airways-threatens-to-cut-heathrow-flights-if-airport-increases-charges/" target="_blank">International Airlines Group, which owns British Airways, has threatened to cut flights from Heathrow </a>if it follows through with plans to increase passenger charges, saying it is becoming “more and more expensive” to operate at the airport. The landing fees are levied by airports on airlines but more often than not end up trickling down to customers in the form of ticket prices. IAG said that about four in 10 of its passengers using Heathrow are doing so to connect to another flight, therefore it could easily use another airport. After the CAA announced their interim figure for Heathrow earlier this month, the IAG declined to say if it would follow through on its threat. But Sean Moulton, an aviation connectivity analyst in London, expressed scepticism about its comments, pointing to the firm's previous rhetoric. “Over the years, BA have threatened to leave Heathrow but London is a high yield, high demand market,” Mr Moulton told <i>The National.</i> “Heathrow is extremely slot-constrained and if any airline loses or gives up slots, it becomes very difficult to get them back. “However, since Covid, airlines are under more pressure to bring costs down and to provide long-term stability. Nevertheless, British Airways will not want to lose its hub at Europe’s busiest airport.” An increase in passenger charges at Heathrow may lead to lower flight prices for people using other London airports, he said. Combined, the city’s six airports – Heathrow, Gatwick, Stansted, Luton, London City and Southend – make it one of the busiest cities in the world by passenger numbers and aircraft movements. “I think the CAA is allowing Heathrow to raise fees to allow other airports to be more competitive and encourage distribution of airlines across London’s six airports. “Whilst airlines may pass the cost on to passengers, airlines who are not at Heathrow will be able to benefit from lower fares – and thus improve connectivity from the other parts of London to the rest of the world, whilst allowing Heathrow to remain competitive for freight and business traffic.” Sally Gethin, a veteran aviation expert, said IAG had made only an “empty threat” and pointed to Heathrow’s international standing. She said any airline would be reluctant to give slots up after being allocated them owing to the “use it or lose it” policy. “It is a little bit hubris that airlines would come out and say this,” she told <i>The National</i>. “I find it hard to believe it completely because slots are still in high demand and they go for a lot of money at Heathrow.” However, she said airlines had a right to push for a better deal for themselves, adding: “It is right that these charges are amply scrutinised, that voices are heard, that airlines are heard.” “It could be viewed as a power struggle as well in the balance of the relationship between the airport and the airline,” she said. Having adapted to significant changes after the 9/11 terrorist attacks, the recession between 2007 and 2009, and the Covid pandemic, Heathrow is resilient enough to absorb another shutdown – but only if it raises passenger charges, Ms Gethin said. She stressed that the “alternative is pretty unthinkable” as Heathrow’s funds would quickly run dry if it was not allowed to charge airlines more to use its facilities. “Heathrow has to go in hard,” she said. “It’s had to push for the maximum amount that it could get at the time so it’s looking for double that original passenger charge and it came away with less than that, which is obviously some mitigation to airlines. “It’s not in anybody’s interest for Heathrow to start to decline so it does need to be preserved,” she said. “I think that Heathrow will have to be very careful though, how it plots it journey ahead now. “It boasts itself up as this international gateway [but] it’s lost that crown; it fell back during the pandemic. “In the long run, Heathrow faces a lot of capacity issues because it doesn’t have space to grow,; there’s problems with whether it will ever get a third runway, for example. So, it’s got to manage this infrastructure with fixed costs.” However, she argued that despite “losing its crown” as Europe’s busiest airport, Heathrow still boats “unbeatable connections” particularly to the Gulf states and the Asia-Pacific region, which may help it regain its international standing in the coming years. She said the increase in charges should serve as a “reminder that it does need some support, and if the government is not willing to provide that, then it’s got this other route, which is charges and of course airlines don’t have that opportunity.” A representative for Heathrow told <i>The National </i>that the airport was “extremely disappointed” in the figure the CAA came back with and said the regulator had relied on “rushed analysis” to reach its conclusion. “As an example, the CAA’s flawed analysis assumes that operating costs at Heathrow next year will be £173m lower than our budget,” they said. “This is even lower than we were able to achieve in 2020, when we served half as many passengers with only one runway and two terminals operating and the benefit of a government furlough scheme. “There are material and basic errors in many aspects of the CAA’s assessment. Uncorrected, this risks leaving Heathrow without sufficient cash flow to support investment in improving passenger service and resilience.” The representative said the CAA’s decision is at odds with forecasts assumed in Heathrow’s recent investor report. Bosses at the airport will conduct further analyses and decide whether to issue an updated report in January. Heathrow is in the process of putting forward a “detailed submission” to the CAA in the hope of receiving a “more considered outcome when it makes its final decision in spring 2022”.
