LONDON – Heathrow Airport announced plans on Dec. 18 to invest £2.3 billion (S$3.95 billion) over the next two years to enhance infrastructure and address booming passenger demand, cementing its status as Europe’s busiest airport.
The investment will target improvements in baggage handling systems and measures to ensure more punctual departures and arrivals. This comes as Heathrow grapples with a sharp rise in passenger numbers since the Covid-19 pandemic disrupted global air travel.
The announcement follows a recent change in ownership, with French private equity firm Ardian and Saudi Arabia’s sovereign wealth fund PIF acquiring a 38% stake in Heathrow from Spanish infrastructure firm Ferrovial and other shareholders.
In the first half of 2024, Heathrow handled a record 39.8 million passengers, more than doubling its numbers compared to pandemic levels. The airport has revised its full-year forecast to 83.8 million passengers.
Like other major European airports, Heathrow has faced operational challenges, including flight delays, cancellations, long queues, and baggage issues, as it adjusts to surging demand. Earlier in 2024, the airport criticized a decision by the British Civil Aviation Authority to reduce fees charged to airlines for 2025 and 2026, which it argued would impact its ability to fund necessary upgrades.
Despite a 3.2% drop in revenue for the first nine months of 2024, attributed to reduced charges, Heathrow reported an 8% increase in net profit after tax, reaching £496 million. The planned investment underscores Heathrow’s commitment to maintaining its position as a leader in European air travel while addressing the operational and financial challenges that come with record-breaking passenger demand.