UK's Heathrow airport raises passenger, cost forecasts

London's Heathrow airport raised passenger forecasts for the year on the back of stronger-than-expected travel demand.

The West London airport said it now expected 54.4 million passengers this year, up from 53 million forecast last month, adding it was working closely with airlines and ground handlers to match supply and demand.

"While we rebuild capacity from the pandemic, resources remain tight, in line with other airports in the UK and Europe," Heathrow said in a statement.

Airports and airlines across Europe have cancelled hundreds of flights due to labour shortages after thousands of workers were fired during Covid pandemic lockdowns, many of which have not returned to the industry. Heathrow has also been embarrassed by mountains of luggage piling up at its terminals because of technical issues.

Britain's second-largest airport, London's Gatwick, last week capped flight numbers during the crucial summer travel season as it struggles to recruit staff.

Heathrow added that the passenger outlook upgrade was expected to increase annual revenue and adjusted core profit. However, operating costs were also expected to rise by 47% to £1.22bn this year partly because of rising utility costs fuelled by soaring energy prices, it added.

Reporting by Frank Prenesti at Sharecast