London’s Heathrow Airport is making profits again. Getty Images
London’s Heathrow Airport is expected to decide on plans for a controversial third runway in the coming months as it aims to increase passenger numbers after returning to profitability in 2023.
Chief executive Thomas Waldby is finalizing the hub’s new business strategy, which includes short-term expansion measures as well as long-term projects such as the long-delayed new runway.
“It’s not easy to manage projects,” Waldby, who took over as CEO in October, said in an interview Wednesday. “There is also the question of what to do with Heathrow’s capacity until we get to the third runway, because no matter what, that third runway is still several years away.”
Heathrow has long been pushing for the addition of a third runway, but it has not progressed beyond the planning stage amid legal challenges from local residents and environmentalists. In 2020, in the midst of the Covid-19 pandemic, the UK Supreme Court ruled in favor of the project, allowing it to proceed.
Heathrow Airport reported an adjusted profit of 38 million pounds ($47.9 million) in 2023, the first since the pandemic. The airport operator said no dividend is yet planned for this year, but “it is possible depending on financial performance.”
Returning to profitability comes at a critical time for the airport, which faces changes to its ownership structure that could hand majority control to Gulf states. In November, Spanish infrastructure company Ferrovial SE agreed to sell its 25% stake to Saudi Arabia’s Public Investment Fund and French private equity firm Ardian, leaving shareholders with a further 35% of Heathrow’s capital. The company will participate in the stock sale through so-called tag-along rights. .
Abu Dhabi’s Mubadala Investment Company is now considering a takeover bid for the airport, as other investors would need to acquire additional stakes, Bloomberg reported on Tuesday. The company will join PIF and Qatar Investment Authority as major shareholders in the London hub.
Waldby’s predecessor, John Holland-Kaye, had tense relations with some of the world’s biggest airlines as Heathrow struggled to cope with increased demand as pandemic restrictions ended. The two companies also clashed over fees, which are among the highest in the world.
The new CEO said he is working to repair those relationships and things have gone “very well so far.”
“The interests of airports and airlines are aligned in 90 to 95 percent of what we do,” he said. “What I’m really focused on is making sure that, as an airport, we can offer value for money.”