NEWS: Heathrow calls for testing to end quarantine as true extent of the crisis is revealed

Heathrow calls for testing to end quarantine as true extent of the crisis is revealed

Yesterday Heathrow gave an update on their current financial situation and passenger number while calling for an effective testing regime rather than quarantine. Many countries around the world have opted for testing and so far none have seen a huge surge in cases although it is definitely not a 100% effective measure. (but then neither is any quarantine that is not enforced at a government facility)

The passenger decline has pushed Heathrow to a loss unsurprisingly. Passenger numbers were down over 96% in Q2 as global aviation came to a virtual standstill. Heathrow anticipates a gradual recovery as countries reopen borders, but that 2020 passenger volumes will be more than 60% lower than 2019. Q2 revenue fell 85% to £119 million and turned to a loss of £93 million. The company recorded an adjusted loss before tax of £471 million in the first six months of 2020.​

Cargo volumes are down over 30%, hit by the loss of passenger flights – Cargo at Heathrow usually travels in the hold of passenger planes. An increase in cargo-only flights has not offset the loss of passenger flights to long haul markets.

Heathrow took decisive action taken to protect jobs and cut costs and acted quickly to reduce the average cash burn by over 30%. They did this by cutting at least £300 million operating costs and cancelling or pausing over £650m of projects. The company has tried to protect as many jobs as possible and maintain pay at or above the London Living Wage.

Heathrow finances remain robust as cash reserves are sufficient until at least June 2021 with no revenue.  However, Heathrow believes that the UK’s economic recovery depends on restarting aviation – the Government’s risk-based approach to allow quarantine-free flights from low and medium risk countries is welcomed by them, but only covers 30% of Heathrow’s markets. Establishing an alternative to quarantine for COVID-free passengers from other countries should be a priority for the Government according to Heathrow and I agree with them. Pre-flight testing for passengers from high-risk countries would allow long haul flying to resume, which is critical for the UK’s economic recovery. Personally I agree with pre-flight testing as it would stop most infected people traveling to the country and spreading it to other passengers potentially.

Heathrow CEO John Holland-Kaye said: “Today’s results should serve as a clarion call for the Government – the UK needs a passenger testing regime and fast. Without it, Britain is just playing a game of quarantine roulette. As many of our customers have experienced, it’s difficult to plan a holiday that way, let alone run a business. Testing offers a way to safely open up travel and trade to some of the UK’s biggest markets which currently remain closed. Our European competitors are racing ahead with passenger testing, if the UK doesn’t act soon global Britain will be nothing more than a campaign slogan.”   

 

The full results