In a recent interview, Heathrow Airport’s leadership discussed the surge in passenger traffic and the potential for reinstating dividends for the first time in four years.
Joanna Partridge reported on the impressive numbers that emerged from the bustling summer months from June to September, which saw a record 30.7 million travelers passing through the airport. This significant increase brought the nine-month total to 63.1 million passengers.
According to Heathrow, the influx of Olympic visitors enjoying European city escapes and the plethora of concerts by major artists like Taylor Swift, Bruce Springsteen, Kylie Minogue, and Shania Twain contributed to this spike. Notably, July 24 marked the airport’s busiest day ever for departures, followed by September 2, which set the record for arrivals. As a result, Heathrow has upped its 2024 passenger forecast, projecting 83.8 million travelers, a jump from the previous estimate of 82.4 million made in April.
Heathrow also hinted at the possibility of reviving its dividend payments this year. The airport stated in a market release that while no dividends were currently anticipated for 2024, “it is probable” they would be reinstated, depending on the financial performance.
In financial terms, Heathrow reported a pre-tax profit of £696 million for the first nine months of the year, an increase from £618 million in the same period last year. Thomas Woldbye, Heathrow’s CEO, reflected on the busy summer, stating, “It tested our colleagues, infrastructure, and airlines to cooperate harder than ever before, with record numbers of passengers traveling through the busiest two-runway airport in the world.”
Notably, Heathrow last distributed a £100 million dividend to shareholders in February 2020, right before the global aviation industry faced unprecedented disruptions due to COVID-19 restrictions. Initially, Heathrow planned to suspend dividends until 2022 as they sought leniency from lenders amid the pandemic’s impact on air travel.
The ownership landscape of Heathrow is shifting, as the infrastructure company Ferrovial has sought to divest most of its stake after nearly two decades as the primary owner. In June, Ferrovial announced a new agreement with Saudi Arabia’s Public Investment Fund and French private equity investor Ardian, which would see it retain just over 5% of its original 25% stake. This renegotiated deal is pending regulatory approval, with hopes for finalization by the end of 2024.
Ardian and PIF are set to acquire 22.6% and 15% of Heathrow’s parent company for a combined total of £3.26 billion, leading to other stakeholders likely selling their interests as well. The timeline for resuming dividend payments remains uncertain, particularly in light of whether the ownership deal will be completed by then, potentially impacting future shareholder dividends.
