Heathrow warns further jobs could go without support after record £2bn loss

By Holly Williams, PA Deputy City Editor

The boss of Heathrow has warned that further jobs may be at risk if the Government does not offer more Covid-19 support after the airport reported the biggest annual loss in its 75-year history.

Chief executive John Holland-Kaye told the PA news agency the group might need to slash costs further if Chancellor Rishi Sunak ignores its plea for 100% business rates relief in next week’s Budget.

He said the group is “trying to avoid compulsory redundancies” among its 4,000 frontline workers, after 1,200 already took voluntary severance last year.

It also axed 500 management jobs – a third of the team – in 2020.

Mr Holland-Kaye warned that more action may have to be taken without extra Government support, fearing the aviation sector will not recover to pre-pandemic levels for another two years.

“We might need further cost reductions – we’re doing everything we can to protect jobs,” he said.

It came as Heathrow revealed that it plunged to a record £2 billion loss in 2020 from profits of £546 million in 2019 after the pandemic saw passenger numbers crash by 73%.

As well as the business rates relief, Heathrow is also calling for an extension of the furlough scheme and to revive VAT-free shopping for tourists to the UK among Budget measures to support the stricken sector.

Mr Holland-Kaye said business rates cost the group £116 million a year – a third of its staff wages bill before the pandemic.

Relief on the tax has already been offered to other sectors and airports across Scotland and Northern Ireland.

“It’s discriminatory and we want a level playing field so we’re not paying £116 million in business rates when we have no business,” he said.

“I hope the Chancellor will do the right thing and allow us all to move on to planning for the recovery.”

He said the west London airport suffered the “toughest year by far” in its history in 2020, with passenger numbers tumbling from 80.9 million in 2019 to 22.1 million – a level not seen since the 1970s.

And more than half of those travelled before the Covid-19 crisis struck.

Heathrow moved to slash costs by nearly £400 million, reduce spending by £700 million and raise £2.5 billion to help see it through the crisis.

It said it is now preparing for a “safe restart of travel”, with international travel set to reopen from May 17 at the earliest under the road map plan unveiled by Prime Minister Boris Johnson on Monday.

But the airport is still expecting traveller numbers in the second half of 2021 to be just 50% of pre-Covid-19 levels.

Mr Holland-Kaye said: “We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale.

“Getting aviation moving again will save thousands of jobs and reinvigorate the economy.”