Heathrow’s foreign shareholders could be forced to fund a cash injection into the business as Britain’s biggest airport struggles with an ‘uncertain’ future

Heathrow’s foreign shareholders may be forced to fund a cash injection into the business as Britain’s biggest airport struggles with an “uncertain” future.

The prospect follows a ruling by the Civil Aviation Authority (CAA) which called on Heathrow to reduce passenger charges.

The disagreement over the size of the charges has sparked a bitter row between Heathrow and airlines that use the airport, including British Airways and Virgin Atlantic.

Right direction?: Heathrow suffers Covid setbacks and travel disruptions in recent months

The airport has been plagued by Covid setbacks and travel disruptions in recent months. It has amassed £15bn of debt after shareholders failed to provide any financial support during the pandemic.

The regulator wants the average fare per passenger to fall from £30.19 to £26.31 by 2026. Heathrow had hoped to see the passenger charge cap raised to a range of £32 to £43. If the reduced fees are introduced it is expected to increase the pressure on Heathrow, which was already forecasting another year of losses.

In its report last month, the CAA said any increased costs could affect Heathrow’s creditworthiness. This, combined with a possible drop in passenger traffic, could put “significant pressure” on Heathrow’s credit performance.

If the debt watchdogs downgrade their guidance on Heathrow, the CAA said the airport would “likely have to rely more on equity financing”.

In an apparent nod to Heathrow’s shareholders, the CAA added: “We note that during the pandemic Heathrow Airport’s shareholders have not supported the group with additional capital, unlike the shareholders of many airline companies.” The largest shareholders of Heathrow are the Spanish infrastructure company Ferrovial and the Qatar Investment Authority. Between 2012 and 2020, Heathrow paid dividends of approximately £4 billion.

The airport claims the CAA “continues to underestimate what is needed to ensure a good passenger service”. Heathrow insisted the proposed fee cuts would worsen the passenger experience.

Airlines UK chief executive Tim Alderslade said he supported “the CAA’s position that Heathrow’s shareholders should ensure the financial viability of the airport”.

Heathrow said: “Private investors will only invest if they can get a fair return on their investment. Without a fair return, investment will dry up and the improvements the CAA claims it wants to deliver will not be funded.”

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