Heathrow says rising costs will wipe out its additional revenue

HEATHROW Airport has warned that rising employment costs and the government’s controversial business rates overhaul will wipe out the additional revenues generated from a record number of passengers passing through the west London hub.

- ALILYON

In an update to bondholders, the UK’s largest airport revealed its profit had plummeted by 38% in the nine months to October, blaming a higher-than-expected rise in costs, primarily driven by government policy.

A 1.8% jump in revenues was outstripped by higher operating costs “linked to employment and business rates’, which Heathrow said had left its bottom line “under pressure”

Adjusted profit before tax fell from £350m to £217m year on year, after its cost base climbed by 5% to £1.2bn. This was despite total passenger revenue ticking up by 0.9%, driven by record traffic numbers.