Heathrow Airport has announced a cap on passenger numbers in an attempt to reduce chaotic scenes of baggage mountains, long queues and flight cancellations.
The airport said it has ordered airlines to “stop selling summer tickets to limit the impact on passengers”.
The west London airport has been plagued by problems since travel resumed once most pandemic restrictions were removed. Most of the issues involve a shortage of staff including airline ground crew, security and baggage handlers. Strikes are also planned by some workers.
Its social media channels have been inundated with angry passengers trying to be reunited with their luggage, some of them more than a week after their flights. Today, passengers were forced to queue outside terminals as temperatures soared beyond 30C.
The new measure will lead to more cancellations on top of the thousands of flights axed in recent months.
Affected passengers will not be entitled to compensation as the reason for the cancellations will be classified as being outside the control of airlines.
It has limited numbers to 100,000 passengers a day, meaning an excess of 4,000 seats will be scrapped daily. This comes on top of tens of thousands of passengers whose flights have already been cancelled. On Monday alone, Heathrow ordered airlines to ditch 61 flights, affecting about 10,000 passengers.
About 131,000 passengers departed the airport on Heathrow’s busiest day on record, August 4, 2019.
In an open letter to passengers on the capacity cap, Heathrow chief executive John Holland-Kaye, who has previously said problems could last 18 months, apologised again and admitted that scenes in terminals had been unacceptable.
He said the government move to suspend its 'use it or lose it' rules on flight routes had helped by allowing flights to be cancelled in advance, but it had not been enough — some airlines were still scheduling too many flights, he said. The policy had led to ghost flights as most airlines would rather fly empty than lose lucrative routes.
The government ordered airports to review their schedules to give passengers confidence that their travel plans would not be disrupted.
Mr Holland-Kaye said: “New colleagues are learning fast but are not yet up to full speed. However, there are some critical functions in the airport which are still significantly under-resourced, in particular ground handlers, who are contracted by airlines to provide check-in staff, load and unload bags and turnaround aircraft.
“They are doing the very best they can with the resources available and we are giving them as much support possible, but this is a significant constraint to the airport's overall capacity.
“However, over the past few weeks, as departing passenger numbers have regularly exceeded 100,000 a day, we have started to see periods when service drops to a level that is not acceptable: long queue times, delays for passengers requiring assistance, bags not travelling with passengers or arriving late, low punctuality and last-minute cancellations.
“Our colleagues are going above and beyond to get as many passengers away as possible, but we cannot put them at risk for their own safety and well-being.”
Mr Holland-Kaye said that because some airlines had taken action but others had not, it had been time to intervene with what he called a “capacity cap”, running from July 12 to September 11.
“Our assessment is that the maximum number of daily departing passengers that airlines, airline ground handlers and the airport can collectively serve over the summer is no more than 100,000,” he said.
“The latest forecasts indicate that even despite the amnesty, daily departing seats over the summer will average 104,000 — giving a daily excess of 4,000 seats. On average only about 1,500 of these 4,000 daily seats have currently been sold to passengers, and so we are asking our airline partners to stop selling summer tickets to limit the impact on passengers.”
He said the move was needed to protect the safety of staff and passengers.
Guy Hobbs, Acting Editor of Which? Travel, said: “While this cap may ease the unacceptable chaos passengers are facing at the UK's biggest airport, thousands of people will now be worrying about whether their flight or holiday plans are about to fall apart.
“Heathrow must work with airlines to quickly provide clarity on which flights are being cut, and airlines need to be upfront with those passengers affected about their right to be rebooked at the earliest opportunity.”
Willie Walsh, director general of the International Air Transport Association and former head of British Airways, panned moves to tell airlines to limit the number of seats they sell to limit summer disruption.
He said the airport underestimated the speed of the pandemic recovery and was focused on profit at the expense of airlines that must now foot the bill.
Europe relaxes rules
Meanwhile, the European Commission proposed to make the bloc's “use-it-or-lose-it” airport slot rule more flexible to respond to unexpected developments in the future, such as pandemic or war.
Airlines normally have to use 80 per cent of their prescribed airport slots to avoid losing them to rivals, but the EU executive suspended the rule during the Covid-19 crisis and set the threshold at 64 per cent for the 2022 summer season.
The Commission announced on Tuesday that the standard slot use rate of 80 per cent would return on October 30, while also prolonging the possibility of applying the “justified non-use of slots” (JNUS) exemption created during the pandemic.
“Maintaining this tool will give us sufficient flexibility — an insurance — to act in case of a new deterioration of the public health situation, or indeed if we are faced with further fallout from the Russian war in Ukraine,” EU Transport Commissioner Adina Valean said in a statement.
Under the proposal, which will need approval by the European Parliament and EU governments, airlines would be allowed to use exemptions due to health emergencies, natural disasters or political unrest.
The Commission would be able to lower the use rate if air traffic falls below 80 per cent, compared with 2019 figures, for four consecutive weeks due to Covid-19 or as a result of Russia's invasion of Ukraine.
The EU executive said it was also proposing measures to mitigate the consequences of the Ukraine war and to restore air connectivity between the EU and Ukraine when possible, including a 16-week recovery period before slot-use requirements become applicable again.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
The years Ramadan fell in May
Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
On Your Wedding Day, June 27 at 7pm
The Great Battle, June 27 at 9pm
The Witch: Part 1. The Subversion, June 28 at 4pm
Romang, June 28 at 6pm
Mal Mo E: The Secret Mission, June 28 at 8pm
Underdog, June 29 at 2pm
Nearby Sky, June 29 at 4pm
A Resistance, June 29 at 6pm
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory