London Heathrow is expecting business travel to account for a higher share of its traffic in 2023, as the corporate market has been “showing signs of recovery” in recent months.
The UK hub airport said that business travellers made up 21.5 per cent of its total passenger traffic in the third quarter of 2022, which compared with 28 per cent during the same period in 2019.
Heathrow said in a report to investors that it would cater for an estimated 61.4 million passengers this year, which is at the “upper end” of its previous forecast and represents around 75 per cent of 2019’s traffic. Passenger numbers only reached 22.1 million travellers in 2020 and 19.4 million in 2021.
“Although demand continues to be driven by outbound leisure; inbound leisure and business travel are showing signs of recovery,” said Heathrow.
“The increase in passenger numbers this year is higher than at any other airport in Europe. Passenger growth was seen in all regions, with Latin America, North America and Europe, in particular, driving the increase in passenger numbers compared to 2021.”
The airport is now predicting that the overall rebound in traffic in 2023 will “slow considerably” due to economic factors. Heathrow is forecasting a 9.5 per cent increase to 67.2 million passengers next year, which would still be 17 per cent lower than its pre-Covid figure.
“Whilst the majority of Covid restrictions have been removed we now face further uncertainty from an economic perspective with key markets already in recession or predicted to be in 2023; the fast-paced levels of growth seen in 2022 are expected to slow considerably,” said Heathrow in its report.
“We expect a higher weighting of business and leisure markets to return going forwards, which have had slower rates of recovery so far. It is expected that east Asia gradually eases restrictions throughout 2023 but the impact of the Ukraine-Russian war is ongoing.”
Heathrow expects to make adjusted ebitda (earnings before interest, taxes, depreciation and amortisation) of £1.7 billion in 2022, which is an increase of £308 million on its previous forecast in June. Ebitda is currently predicted to rise by 4 per cent in 2023 to £1.75 billion.