Q1 2026 Trading Statement
Summary by AI BETAClose X
HEATHROW (SP) LIMITED
TRADING STATEMENT FOR THE 3 MONTHS
ENDED 31 MARCH 2026
Positive start to the year but with an uncertain outlook ahead - 18.9 million passengers travelled through Heathrow in Q1 (+3.7% YoY). Following airspace closures in the Middle East, there was an increase in transfer passengers across Heathrow's network. While Heathrow has temporarily absorbed demand from elsewhere, passenger numbers for the rest of the year are likely to be impacted whilst there is significant uncertainty in the Middle East.
Recognised among the world's best for service - Passengers rated Heathrow as one of the best airports globally in the Skytrax Awards (up five places over last year), with the airport also named the world's best for retail and remaining Europe's most punctual major hub. We are also the world's only major hub to have fully rolled out next generation security scanners for all passengers allowing liquids and laptops to be left inside cabin baggage.
Global connectivity powering UK trade - As the world's most connected airport and the UK's gateway to growth, Heathrow continues to play a critical role in driving economic prosperity. More than a quarter of UK trade equivalent to
£300 billion annually passes through Heathrow, and with Q1 2026 cargo volumes aligned to last year, Heathrow is supporting more businesses and exporters from across the country to reach customers in markets around the world.
Good value for passengers alongside continued investment - Heathrow is preparing to invest over £1.3 billion this year to improve passenger experience, including major upgrades to Terminal 4, replacing Terminal 5's passenger transit system with a new fleet to increase capacity and starting work on a new baggage system in Terminal 2. We are currently reviewing the CAA's initial proposal in detail to fully understand the implications for delivering the innovation, progress and improvements customers expect. As it stands, the CAA's proposal may force choices that create trade-offs for service and delay delivery.
Expansion essential to unlock growth and deliver for passengers - Heathrow is proudly celebrating its 80th anniversary this year, yet growth at the airport has been constrained for more than twenty years of its operating life. Expansion will unlock 50% more capacity, enabling more routes, greater competition and lower fares for passengers. Progress now depends on upcoming regulatory decisions from the CAA and the Government's draft Airports National Policy Statement in July, which are critical to maintaining investor confidence and keeping plans on track for planning permission by 2029, with the most imminent milestone being the CAA consulting on its short list of regulatory models for expansion in coming weeks.
Financial performance - In the first three months of 2026, revenue increased by 2.3% to £844 million, driven by higher passenger numbers, a favourable travel mix, continued expansion in premium services, increased food & beverage from higher traffic in addition to growth in Other Regulated Charges. These gains were partly impacted by reduced air traffic movements and lower noise charges due to quieter aircraft flown. Adjusted operating costs increased by 6.5%, reflecting higher people costs due to wages, national insurance and volume alongside greater IT investment and increased Passengers Requiring Support costs. While lower rates and utilities mitigated some of the cost pressures, adjusted EBITDA declined by 1.1% to £449 million.
Outlook - We have not updated our 2026 outlook yet, but we have seen some impact from recent Middle East disruption and are closely monitoring developments which will be reflected in our June 2026 Investor Report.
"Heathrow delivered a solid start to 2026 but the outlook is uncertain due to the ongoing conflict. Our passengers continue to recognise the excellent service our teams provide, and we are proud to be rated among the best airports in the world, while remaining Europe's most punctual major hub. However, Heathrow is full. That means fewer choices and higher fares for passengers and missed opportunities for the UK economy. Expansion is about delivering more routes, more competition and ultimately better outcomes for the people and businesses who rely on us. Our plan is privately financed, rigorously assessed and focused on value. With the right regulatory framework and government policy in place, we are ready to invest, grow and keep the UK connected to the world."
Sally Ding | Heathrow CFO
|
Traffic performance indicators (1) |
2026 |
2025 |
Var (%)(2) |
|
Passenger traffic (millions) |
18.9 |
18.2 |
3.7 |
|
Passenger ATM ('000) |
111.9 |
112.1 |
(0.2) |
|
Seat factor (%) |
76.6 |
73.8 |
3.8 |
|
Seats per ATM |
221.0 |
220.7 |
0.1 |
|
Cargo tonnage ('000) (3) |
388 |
392 |
(1.0) |
|
Service standard performance indicators (1) |
2026 |
2025 |
|
|
ASQ |
4.11 |
4.06 |
|
|
Arrival punctuality (%) |
79.9 |
81.8 |
|
|
Departure punctuality (%) |
81.7 |
81.1 |
|
|
Security performance (%) |
98.5 |
97.3 |
|
|
Baggage connection (%) |
98.5 |
98.8 |
|
|
|
|||
|
As at or for the 3 months ended 31 March |
2026 |
2025 |
Var (%) |
|
(£m unless otherwise stated) |
|
|
|
|
Total revenue |
844 |
825 |
2.3 |
|
Aeronautical |
511 |
518 |
(1.4) |
|
Retail |
179 |
170 |
5.3 |
|
Other |
154 |
137 |
12.4 |
|
Adjusted operating costs (4) |
395 |
371 |
6.5 |
|
Employment |
117 |
105 |
11.4 |
|
Operational |
123 |
110 |
11.8 |
|
Maintenance |
62 |
60 |
3.3 |
|
Rates |
28 |
29 |
(3.4) |
|
Utilities and Other |
65 |
67 |
(3.0) |
|
Adjusted EBITDA(5) |
449 |
454 |
(1.1) |
|
Adjusted profit before tax(6) |
82 |
82 |
- |
|
Heathrow (SP) Limited consolidated nominal net debt(7) |
16,178 |
15,706 |
3.0 |
|
Heathrow Finance plc consolidated nominal net debt(7) |
17,657 |
17,622 |
0.2 |
|
Regulatory Asset Base(8) |
21,390 |
21,263 |
0.6 |
|
Heathrow SP's senior regulatory asset ratio (Class A) (9) |
63.0% |
63.1% |
(0.1) |
|
Heathrow SP's junior regulatory asset ratio (Class B) (9) |
75.6% |
73.9% |
1.7 |
|
Heathrow Finance's regulatory asset ratio (9) |
82.5% |
82.9% |
(0.4) |
|
Qualifying cash and cash equivalents and term deposits (9) (10) |
1,054 |
1,117 |
(5.6) |
Notes
(1) For the three months ended 31 March.
(2) Calculated using unrounded figures.
(3) Cargo tonnage includes mail volumes.
(4) Adjusted operating costs exclude depreciation, amortisation, fair value gains and losses on investment properties and exceptional items (if any).
(5) Adjusted EBITDA is profit before interest (net finance costs), taxation, depreciation, amortisation, fair value gains and losses on investment properties and exceptional items (if any).
(6) Adjusted profit before tax excludes fair value gains and losses on investment properties and financial instruments, and exceptional items (if any).
(7) Consolidated nominal net debt is short and long-term debt less cash and cash equivalents and term deposits. It includes index-linked swap accretion and the hedging impact of cross-currency interest rate swaps. It excludes pre-existing lease liabilities recognised upon transition to IFRS 16, accrued interest, bond issue costs and intra-group loans. 2025 figures are as at 31 December 2025.
(8) The Regulatory Asset Base ('RAB') is a regulatory construct, based on predetermined principles not based on IFRS. It effectively represents the invested capital uplifted by inflation on which we are authorised to earn a cash return. 2025 figures are as at 31 December 2025.
(9) 2025 figures are as at 31 December 2025.
(10) The Group's liquidity horizon is within our target range of 18 to 24 months. This assessment considers operating cashflows, capital investment, debt service costs, debt maturities, repayments and dividends, along with £1.6 billion in cash resources across the Heathrow Finance Group and undrawn revolving credit facilities and committed borrowings of £1.5 billion.
Heathrow (SP) Limited is the holding company of a group of companies that fully own Heathrow airport and together with its subsidiaries is referred to as the Group. Heathrow Finance plc, also referred to as Heathrow Finance, is the parent company of Heathrow (SP) Limited.
Disclaimer
These materials contain certain statements regarding the financial condition, results of operations, business and future prospects of Heathrow. All statements, other than statements of historical fact are, or may be deemed to be, "forward-looking statements". These forward-looking statements are statements of future expectations and include, among other things, projections, forecasts, estimates of income, yield and return, pricing, industry growth, other trend projections and future performance targets. These forward-looking statements are based upon management's current assumptions (not all of which are stated), expectations and beliefs and, by their nature are subject to a number of known and unknown risks and uncertainties which may cause the actual results, prospects, events and developments of Heathrow to differ materially from those assumed, expressed or implied by these forward-looking statements. Future events are difficult to predict and are beyond Heathrow's control, accordingly, these forward-looking statements are not guarantees of future performance. Therefore, there can be no assurance that estimated returns or projections will be realised, that forward-looking statements will materialise or that actual returns or results will not be materially lower than those presented.
All forward-looking statements are based on information available at the date of this document. Accordingly, except as required by any applicable law or regulation, Heathrow and its advisers expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained in these materials to reflect any changes in events, conditions or circumstances on which any such statement is based and any changes in Heathrow's assumptions, expectations and beliefs.
These materials contain certain information which has been prepared in reliance on publicly available information (the "Public Information"). Numerous assumptions may have been used in preparing the Public Information, which may or may not be reflected herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on the position or results shown by the Public Information. As such, no assurance can be given as to the Public Information's accuracy, appropriateness or completeness in any particular context, or as to whether the Public Information and/or the assumptions upon which it is based reflect present market conditions or future market performance. The Public Information should not be construed as either projections or predictions nor should any information herein be relied upon as legal, tax, financial, investment or accounting advice. Heathrow does not make any representation or warranty as to the accuracy or completeness of the Public Information.
All information in these materials is the property of Heathrow and may not be reproduced or recorded without the prior written permission of Heathrow. Nothing in these materials constitutes or shall be deemed to constitute an offer or solicitation to buy or sell or to otherwise deal in any securities, or any interest in any securities, and nothing herein should be construed as a recommendation or advice to invest in any securities.
This document has been sent to you in electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither Heathrow nor any person who controls it (nor any director, officer, employee nor agent of it or affiliate or adviser of such person) accepts any liability or responsibility whatsoever in respect of the difference between the document sent to you in electronic format and the hard copy version available to you upon request from Heathrow.
Any reference to "Heathrow" means Heathrow (SP) Limited (a company registered in England and Wales, with company number 06458621) and will include its parent company, subsidiaries and subsidiary undertakings from time to time, and their respective directors, representatives or employees and/or any persons connected with them.
These materials must be read in conjunction with the Heathrow (SP) Limited annual report and financial statements for the year ended 31 December 2025.
|
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