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Heathrow records losses of over £2 billion due to COVID restrictions

Heathrow records losses of over £2 billion due to COVID restrictions
Heathrow records losses of over £2 billion due to COVID restrictions

Heathrow airport has been reportedly recorded an annual loss of over £2 billion in 2020 owing to closure of borders and government restrictions on international travel to control the growing spread of the COVID-19 pandemic.

As per John Holland-Kaye, the Chief Executive of Heathrow, it is expected that people would be able to go on summer holidays, after the prime minister’s announcement regarding England’s plans to resume international travel from 17th May 2021. Holland-Kaye has further stated that there will be huge demand for travel and even if it is a month or so later, the recovery is on its way.

According to Heathrow, the number of passengers who passed through the airport dropped to 22.1 million in 2020, which is more than half accounting for those who travelled in January and February. These figures denote a fall of 73 per cent as compared to 2019 and the smallest annual total since 1975.

Even though some dedicated cargo flights have helped the airport in offsetting some of the lost passenger travel, sources cite that Heathrow recorded a fall of 28 per cent in cargo volumes during 2020.

For the record, as COVID-19 spiked, Heathrow had taken quick action to slash its operating costs by closing two terminals and one runway, cutting pay, and raising money. The company, however, warned that airports had very huge fixed costs.

A statement by Heathrow adds that while government policies had effectively led to the closure of borders, Heathrow had obtained no support from the government other than furlough. The airport operators also did not see any benefit from business rates relief, unlike other airports, and hospital, retail, and leisure businesses.

The airport has warned that the economic recovery of Britain will be held back until the restart of long-haul passenger flights, including to prime markets like the U.S. Meanwhile, travel companies and airlines recorded a rise in holiday bookings following the announcement by Boris Johnson.

Source credit: https://www.theguardian.com/uk-news/2021/feb/24/heathrow-hit-by-2bn-loss-as-airport-calls-for-more-covid-support

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Sunil Jha

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