Heathrow hits out at regulator as profits soar

 
Marion Dakers
HROW

HROW warned yesterday that its investors are not prepared to put in “a penny more” to improve the airport unless the regulator allows them to generate a better rate of return.

The airport, which yesterday posted a 22 per cent rise in profits, is furious at the Civil Aviation Authority’s move to cap any rises in passenger yield in line with inflation for five years from April 2014.

“We made no secret of the fact that these restrictions are the toughest that Heathrow has ever faced,” chief financial officer Jose Leo told City A.M.

“Heathrow invested £11bn over the last 10 years. Our investors are keen to continue investing providing the rate of return is attractive. At this level of return they don’t see any point in investing a penny more than you need to keep the airport running safely.”

Heathrow’s biggest investors include Spain’s Ferrovial, the Qatar Investment Authority and the Singaporean sovereign wealth fund.

The airport’s management “will do our best” to persuade the CAA to modify its proposal, Leo said.

The watchdog has already raised the cap from inflation minus 1.3 per cent, which it put forward in April.

Leo’s comments came as the airport reported a 10.7 per cent rise in revenues to £1.84bn for the nine months to the end of September, while earnings before interest, tax, depreciation and amortisation (Ebitda) came in at £848m.

The airport’s revenues from aeronautical charges rose 18.3 per cent to £1.13bn, or £20.60 per passenger.