UK's Heathrow Airport says slowing growth shows need for new runway

By Sarah Young

LONDON (Reuters) - Britain's Heathrow Airport forecast slower passenger growth in 2025, highlighting the need for a new runway weeks after the government threw its weight behind expansion at the hub as it seeks to boost trade and economic growth.

Chief Executive Thomas Woldbye said Heathrow also needed government backing in terms of faster planning approvals, airspace modernisation and funding structures.

Last year 83.9 million people travelled through Heathrow, Europe's busiest airport, beating the pre-COVID record set in 2019 by 3 million. It forecast passenger numbers would rise more slowly this year to 84.2 million.

The airport's two runways are full and it can only add passengers when airlines fly larger planes. European competitors Paris and Amsterdam have four and six runways, respectively.

British governments have dithered for decades over Heathrow expansion, caught between the desire for growth and environmental concerns, but finance minister Rachel Reeves said in January the case for the runway was stronger than ever.

The government will on Thursday decide whether to allow the expansion of Gatwick, Britain's second-biggest airport.

"There's a need for both," Woldbye said in an interview on Wednesday.

Questions remain over how to fund the Heathrow expansion, likely to be many billions more than the 14 billion pounds ($17.7 billion) estimated in 2014. Woldbye said Heathrow would make clear its preferences when it makes a submission to the government this summer.

"How that can be structured and split over time is what we're looking at," he said, adding that he would hold talks with airlines.

Heathrow's biggest airline British Airways and Virgin Atlantic have long complained that the airport is the most expensive in the world.

For 2024, Heathrow posted pretax profit of 917 million pounds, up 31% on the previous year.

The airport said it would pay its owners, which include Ardian, Qatar Investment Authority, and Saudi Arabia's Public Investment Fund, a dividend of 250 million pounds, the first payout for five years.

($1 = 0.7904 pounds)

($1 = 0.7903 pounds)

(Reporting by Sarah Young, Editing by Paul Sandle and Louise Heavens)