‘They think London is under attack’ – Heathrow boss says US visitors stay away

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“There’s a wave of restrained demand coming through the airport,” said John Holland-Kaye, Heathrow boss. “Fantastic to see that.”

This week, the CEO of the UK’s busiest airport raised its forecast for passenger numbers this year by 16 percent to 52.8 million. That’s almost two-thirds of the pre-pandemic volume.

Heathrow was the only European hub to see a reduction in traffic in 2021, due to stricter travel restrictions than EU countries. The airport is now well on its way to recovery, isn’t it?

Not so fast, says Mr. Holland-Kaye. Much of the surge in demand is fueled by people redeeming vouchers, especially with British Airways, and end up taking trips not taken in the past two years.

“We hear anecdotal stories of people taking two or three weekend trips, city breaks, and then family vacations in a month, making the most of the opportunity to travel,” he says.

“We expect to see that all summer, so that’s why we’re raising our forecast.

“But after the summer, we are cautious that the reality of the underlying economy will start to bite.”

The cost of living in the UK, combined with high inflation and lower growth around the world, is the first damper. Add to that rising jet fuel prices and the risk of new waves of Covid in the fall and winter, and the outlook is far from bright.

Even more disturbing is Russia’s brutal invasion of Ukraine, which is preventing North American travelers from entering Europe.

“If you look at something like the Gulf War, traffic to Heathrow from North America fell by seven or eight percent during the Gulf War.

“We know anecdotally that many North Americans are deterred from coming to Europe because of the war in Ukraine. They think London is under attack.

“So the UK, as the largest inbound source for US visitors, will be more affected than any other market in Europe.”

In the utterly unlikely event that I was in charge of Heathrow, I would feel burdened by the volume of cancellations imposed each day by British Airways – the main airline, with more than half of the slots at the most limited airport from Europe.

I keep a daily count and on both Thursday and Friday it was 110 flight sectors to and from Heathrow – conservatively representing 9,000 passengers that were supposed to use the airport.

But Mr. Holland-Kaye puts a positive spin on BA’s resourcing issues.

“If an airline knows that it will be difficult to meet the demand, it is better that they inform people in advance so that they can make other arrangements than have people show up on the day and then find out that they can’t fly – especially if they’re already checked in and checked into their bags, at which point it becomes very difficult to get their stuff back and make other arrangements.

“What we actually see is that when British Airways has told passengers in advance that they cannot fly, they have made arrangements with other airlines. So we’re still getting some of the passenger numbers – some going to other places. But I think that’s the responsible thing to do for passengers.”

With Heathrow dropping from undisputed first place in Europe to 10th last year, the airport is doing everything it can to contain Covid losses – £4 billion so far.

Every little bit helps, and from this weekend onward, taxis will start paying the £5 drop-off – with the cost being passed on to passengers.

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