Heathrow fends off fears of travel demand downturn — but it’s not out of the woods yet
Heathrow’s passenger numbers make one thing clear — travel demand isn’t going anywhere just yet.
A busy October, in which Europe’s biggest hub carried seven million passengers and jumped up the global league table, will likely quell fears of a downturn following a record summer.
Airlines and airports are emerging reasonably unscathed so far though and are now closing in on the festive season, typically one of the busiest periods of the year.
Driving Heathrow’s resilience is strong transatlantic travel. EU trips unsurprisingly made up the lion’s share of traffic over October. However, North America was not far behind, rising nearly 18 per cent to 1.8m over the period.
The West London hub has been riding a wave from across the pond this year. Western Europe to the USA was one of the first long-haul markets to bounce back from the pandemic and travellers have been coming to Europe in droves to make the most of a strong dollar.
Investors shouldn’t sniff at Asia-Pacific travel demand either. Although smaller in proportion, it has nearly doubled at Heathrow since November last year, coming in at 9.4 million out of a total of around 77 million.
The return of North American flights to Asia-Pacific is ramping up into 2024 and carriers are increasingly banking on the region being the next source of high-margin revenue.
One busy month, propped up in part by October half term, doesn’t mean Heathrow is out of the woods just yet though.
Airline shares have fallen on renewed conflict in the Middle East, with hundreds of the routes to the region now axed. Europe’s long-awaited corporate travel recovery seemingly keeps getting pushed back. And Heathrow still remains, marginally, in the red as it contends with a whopping £14bn debt pile.