With the first three months of 2023 now in the history books, the UK's London Heathrow Airport (LHR) took the opportunity this morning to share its results for the year's first quarter. Its findings were a mixed bag, as, despite making a loss in Q1, Heathrow's passenger numbers were high enough to see it retain Europe's top spot.

Significant year-on-year growth

All in all, London Heathrow Airport handled some 16.9 million passengers between January 1st and March 31st, 2023. This represents an impressive 74.2% increase compared to the first quarter of 2022, when it processed just 9.7 million passengers in the same period. Commenting on the Q1 results, CEO John Holland-Kaye said:

"2023 has got off to a strong start, and I'm proud of the way colleagues are working together to deliver great passenger service every day. We are building our route network to connect all of Britain to the growing markets of the world."

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Inside the busy London Heathrow Departure Lounge
Photo: CSWFoto/Shutterstock

These figures saw Heathrow outrank the likes of Amsterdam Schiphol (AMS), Frankfurt Airport (FRA), and Paris Charles de Gaulle (CDG) to remain Europe's busiest airport. It was also the second-busiest in the world in terms of international travel during the first quarter of 2023. However, it is still facing losses.

Financial hurdles still to be overcome

At face value, Heathrow's economic performance in the last quarter appears to have been promising. Indeed, its revenue of £814 million ($1.016 billion) represented a 57.8% increase compared to the £516 million ($644 million) generated in the same period last year. Cash generated from operations also rose by 34.5%.

However, despite this promising financial growth, Heathrow Airport still made an overall adjusted pre-tax loss of £139 million ($173.5 million) in the first quarter of 2023. While this is still 37.7% better than the figure of £223 million ($278 million) that it lost pre-tax accounting for adjustments in Q1 of 2022, it is still far from ideal.

British Airways Boeing 777 & Heathrow ATC Tower
Photo: 1000 Words/Shutterstock

The reason for this, the airport asserts, is "the revenue allowance in the CAA's H7 settlement being set too low." This concerns the caps to passenger fees at Heathrow that the UK's Civil Aviation Authority announced earlier this year. The airport confirmed today that it has "appealed the H7 settlement to the CMA."

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Network growth

The overall impact of its ongoing losses is the fact that, as the airport explains, Heathrow "[does] not forecast any dividends in 2023."

That being said, away from the financial side, things are looking up in terms of the facility's connectivity. For example, it notes that "Loganair [is] taking advantage of our domestic charges discount to open up new routes to Northern Ireland and Scotland." The reopening of borders and the relaxation of restrictions will also see Chinese traffic grow, with Beijing and Shanghai served twice daily this summer.

What do you make of London Heathrow's recent economic performance? Did you use the UK's and Europe's busiest airport in the first quarter of the year? Let us know your thoughts and experiences in the comments!

  • heathrow_17581988126223
    London Heathrow Airport
    IATA/ICAO Code:
    LHR-EGLL
    Country:
    United Kingdom
    CEO:
    John Holland-Kaye
    Passenger Count :
    19,392,178 (2021)
    Runways :
    09L/27R - 3,902m (12,802ft) | 09R/27L - 3,660m (12,008ft)
    Terminals:
    Terminal 2 | Terminal 3 | Terminal 4 | Terminal 5