June 2026 Investor Report

Heathrow

26 June 2026

 

26 June 2026

Heathrow Funding Limited

Heathrow Finance plc

Publication of June 2026 Investor Report

On behalf of Heathrow Airport Limited, Heathrow Express Operating Company Limited, Heathrow (AH) Limited and Heathrow (SP) Limited ("Heathrow SP"), LHR Airports Limited (as Security Group Agent) is today distributing its semi-annual Investor Report to various parties pursuant to the terms of the Common Terms Agreement entered into on 18 August 2008 (as amended) (the "CTA").

The Investor Report is also being distributed by Heathrow Finance plc ("Heathrow Finance") to various parties pursuant to Heathrow Finance's £275 million 3.875% Senior Secured Notes dated 5 June 2017 and due 2027, the £300 million 4.125% Senior Secured Notes dated 15 November 2019 and due 2029 and the £400 million 6.625% Senior Secured Notes dated 19 March 2024 and due 2031  (the "Heathrow Finance Bonds"), a note purchase agreement dated 14 September 2018 (the "Note Purchase Agreement") and pursuant to Heathrow Finance's facilities agreements dated 22 November 2018, 23 November 2018, 1 February 2019, 8 May 2019, 16 August 2019 and 2 December 2019 (the "Heathrow Finance Facilities Agreements").

The Investor Report contains information relevant to creditors of both Heathrow SP (and its subsidiaries) and Heathrow Finance.

The attention of potential readers of the Investor Report is drawn to page 2 of the document, which contains an Important Notice, including in relation to certain forward-looking statements included in the Investor Report, and contains a description of the basis on which the operational and financial information included in the document has been prepared.

The Investor Report includes an updated forecast for 2026 for the financial performance of Heathrow SP prepared on a consolidated basis, forecast nominal debt and financial ratios for Heathrow SP and Heathrow Finance. Heathrow SP, through its indirect subsidiary, Heathrow Airport Limited, owns Heathrow Airport.

This report sets out the actual financial performance and ratios for Heathrow (SP) in 2025 and forecast figures for 2026, together with key business updates. Additional information specific to Heathrow Finance is set out in Appendix 6.

In the 5 months to May 2026, passenger numbers reached 32.8 million, a 0.7% increase year on year, driven by larger aircraft and a boost in connecting passengers, although the ongoing conflict in the Middle East is putting notable downward pressure on traffic. Given the uncertain 2026 outlook, we are forecasting a traffic range from 84.5 million to 80.1 million with a base case of 83.6 million passengers (-1.1% year on year). This reflects the risk that continued volatility in the Middle East could dampen broader traffic volumes, with impacts extending beyond the region to global travel demand over the remainder of the year.

Our operational performance for the first 5 months to May 2026 demonstrate continued incremental performance. We remain the most punctual hub airport in Europe with 80.1% of arrivals and 81.6% of departures within 15 minutes of schedule (2025: 81.8% and 81.7%). Security performance improved with 98.7% of passengers passing through Central Search Areas in under five minutes (2024: 98.4%).

Adjusted EBITDA is forecast to decline by £147 million compared to 2025 and
£60 million versus the December investor report forecast. Aeronautical revenue is expected to decline by £49 million versus the December 2025 investor report due to lower traffic outlook while non-aeronautical income remains broadly in line with previous projections. Operating costs for 2026 are expected to remain broadly aligned to prior forecast albeit will increase year on year, driven by higher employment costs and the full-year impact of business rates increases. Our liquidity position remains strong sitting between 18 to 24 months with headroom to covenants at Heathrow (SP) or Heathrow Finance when considering our range of possible traffic outcomes. No covenant breach is forecast in the event of a stress scenario where traffic drops to 69 million passengers.

We published our 2025 Sustainability Report in March highlighting our achievements and areas for further action. Notably, strong progress on Sustainable Aviation Fuel ("SAF") saw uptake reach 3.1% in 2025 exceeding targets and paving the way for a 2026 target of 5.6% or 2% above the UK's SAF mandate. The Climate Adaption Strategy and Air Quality Action Plan were also published in March. We maintained our Biodiversity Benchmark accreditation and also launched a webtool to give communities clear, location-specific information about aircraft noise.

We forecast capex for the H7 period to remain at £4.7 billion (£1,266 million for 2026) across Next-Generation Security, T2 baggage, carbon and sustainability, commercial revenue, asset management & compliance and efficient airport programmes.

On 31 March 2026, the CAA published its H8 Initial Proposals (CAP3232). Heathrow sees these as a starting point but not yet providing a clear or investable pathway due to a constrained capex envelope, under‑calibrated WACC and operating cost assumptions. Heathrow has proposed targeted adjustments to ensure the final settlement supports delivery of improved consumer outcomes. The CAA's Final Proposals are expected for November 2026, and a Final Decision should be published in April 2027.

In January, Heathrow's board approved new investment to start work on a planning application for a third runway aligning with the Government's timeline for Heathrow to secure planning permission by 2029. Heathrow has engaged closely with the CAA on the regulatory treatment of early expansion costs, supporting the approach to allow recovery of efficiently incurred costs to provide regulatory certainty and maintain investor confidence, while also proposing targeted, evidence-based refinements to the draft decision to ensure the framework fully supports timely, efficient and financeable delivery. Heathrow broadly supports the CAA's direction on longer-term regulatory models, advocating for an enhanced single RAB model with an integrated owner-operator and targeted improvements to governance, incentives and assurance, while emphasising that more complex structural alternatives could increase risk, worsen passenger outcomes, raise costs, and delay delivery. The Department for Transport published the draft Heathrow Expansion National Policy Statement (HENPS) on 18 June for consultation and parliamentary scrutiny, setting out the policy framework for Heathrow expansion proposals.

The Investor Report document is available in pdf format at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/8460J_1-2026-6-25.pdf

The Investor Report is available from today via the Heathrow Investor Centre at https://www.heathrow.com/company/investor-centre/reports/investor-reports

By way of reminder, pursuant to the CTA, the Heathrow Finance Bonds, Note Purchase Agreement and the Heathrow Finance Facilities Agreements (as appropriate), the following is available on the Heathrow Investor Centre at https://www.heathrow.com/company/investor-centre/reports/annual-accounts:

-     consolidated financial statements of Heathrow (SP) Limited for the year ended 31 December 2025.

-     consolidated financial statements of Heathrow Funding Limited for the year ended 31 December 2025.

-    consolidated financial statements of Heathrow Finance plc for the year ended 31 December 2025.

-     regulatory accounts for Heathrow Airport Limited for the year ended 31 December 2025.

For investor enquiries please contact Wendy Butler, Debt Investor Relations Manager, [phone].

¹ Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, and exceptional items

 

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