Heathrow warns of slowdown in travel from America
Heathrow has warned that economic uncertainty unleashed by Donald Trump's trade war has sparked a slowdown in travel from the United States.
In an update to investors, Europe's busiest airport said it is beginning to see indications of a drop in bookings on transatlantic routes most favoured by business travellers.
Heathrow said that while demand among Britons for leisure flights to the US remains strong, it has 'observed some early signs of softness on business-heavy routes'.
It added: 'The impact of the economic uncertainty across North America has made this market more challenging so we are maintaining a close watching brief on traffic trends.'
Heathrow's comments suggest that demand in the world's biggest corporate and premium travel market is beginning to be undermined by Mr Trump's trade war and its impact on business confidence. They said that while transatlantic routes continue to represent a core strength of the network it serves, there is an 'overhanging uncertainty' about how well they will hold up going into the summer peak.
Slight recovery
However, US passenger volumes still increased from January through May compared with a year earlier, it said, while cargo volumes jumped amid increased trade activity ahead of the president's liberation day tariffs announcement in April.
British Airways (BA) has previously reported softer ticket sales for its economy class cabins on flights from the US, though Luis Gallego, chief executive of parent company International Airlines Group, said this month that demand was recovering.
Virgin Atlantic also said in March that it was seeing a lower level of bookings made in the US, with a few weeks where it had turned negative.
Heathrow predicted that passenger numbers will increase 0.5pc this year to 84.2m, while warning of a 3pc drop in operating profits as it absorbs the impact of the Government's National Insurance tax raid.
Thomas Woldbye, Heathrow's chief executive, said punctuality at the airport has improved to the best level among European hubs, while almost 97pc of passengers were now clearing security in less than five minutes.
Mr Woldbye had faced criticism over service standards from Heathrow Reimagined, a lobby group that includes BA and Virgin and is demanding a reset of the charging mechanism for flying from the airport ahead of the construction of a third runway.
It is seeking the establishment of a new body that will give airlines more say over infrastructure spending, and a move to competition between Heathrow's terminals.
The Civil Aviation Authority will set out the scope of a review of the charging system as early as next week.
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