Heathrow Touts U.K. to Lead Long-Haul Flight Revival

Britain can become the first country to resume mass international travel, building on its early roll-out of coronavirus vaccinations, according to the head of London Heathrow airport.

As the U.K. makes progress in battling Covid-19 and curbs are removed, long-haul travel to other low-risk nations is likely to recover, Chief Executive Officer John Holland-Kaye said in an interview Wednesday. He cited Australia, New Zealand, Singapore and even China as examples.

“We will see a patchwork reopening of long-haul markets depending on the progress of vaccinations,” the CEO said.

The pandemic wiped out almost two-thirds of revenue at what was previously Europe’s busiest airport, and pushed the hub to a 2 billion-pound ($2.8 billion) loss last year, Heathrow said Wednesday in a statement.

But Prime Minister Boris Johnson’s tentative plan to resume flights as early as May 17 gives the U.K. a chance to get people flying before rival economies. Heathrow aims to recover ground lost to European rivals including Paris Charles de Gaulle, Amsterdam Schiphol and Frankfurt.

Trans-Atlantic

Airline shares surged this week on Johnson’s plan to gradually release the U.K. economy from lockdown.

A jump in late-summer bookings has been led by Mediterranean resorts, though long-haul specialist Virgin Atlantic Airways Ltd., which has consolidated operations at Heathrow, reported a ninefold increase in web sales, led by Caribbean destinations.

An early return of mass trans-Atlantic travel remains unlikely, though there should be progress some time this summer, Holland-Kaye said. The U.S. is Heathrow’s biggest market, accounting for 20% of passengers.

Johnson has a unique opportunity to shape a common international standard for safe travel with other world leaders when he hosts the G7 summit in June, Holland-Kaye said.

Britain could potentially return to curb-free travel corridors for the lowest-risk nations, perhaps based around proof of vaccination, with testing retained for other countries and quarantines left in place for people coming from so-called red list locations, he said.

New Entrants

There’s also scope for new entrants. Heathrow, where IAG SA’s British Airways is the largest operator, has attracted eight new airlines to help fill vacant slots, including Taiwanese flag-carrier China Airlines, Czech Airlines, Ukraine Airlines and India’s Vistara.

Incumbent carriers too may develop plans to better tap an earlier short-haul revival, such as deploying wide-body planes on some European routes, the CEO said.

Holland-Kaye reiterated calls for support for aviation in the U.K. budget next month, including 100% business rates relief, an extension to furlough payments, and reversing a tourist tax.

“We will work with the global travel task-force so that Britain can become the first country in the world to safely restart international travel and trade at scale,” he said.

By the numbers:
  • Passenger traffic fell 73% in 2020 to 22.1 million people
  • More than half of 2020 traffic came in January and February, before lockdowns hit
  • Heathrow expects 37.1 million passengers this year, down 54% from 2019
  • Most of the rebound will come in the second half

©2021 Bloomberg L.P.

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