Heathrow eyes earnings crunch as national insurance hike weighs
London Heathrow airport expects its earnings for 2025 to take a hit as it weighs the cost of Labour’s hike to employer’s national insurance contributions.
The airport expects earnings before interest, taxes, depreciation, and amortisation (EBITDA) to decrease by three per cent to near £1.98bn over the year due to higher operating costs brought on by Rachel Reeves’ tax grab.
The Chancellor introduced the 1.2 per cent increase to NICs during her maiden Autumn budget, alongside a whopping £36.2bn worth of tax changes.
Heathrow said as well as higher contractual expenses, pressures from security requirements and additional service mitigations were set to add to costs.
Regarding its power outage on March 21, Heathrow said it had accepted and will implement all 28 recommendations from former transport secretary Ruth Kelly’s review.
More than 32m passengers travelled through the airport in the five months to May 2025 as it looks to top a record-breaking 83.9m in 2024.
Heathrow projected a 0.5 per cent bump in passenger traffic levels for 2025, citing that leisure demand remains strong.
The airport also highlighted its streamlined operations, achieving 98.4 per cent of regulated queue times in Central Search Areas of under five minutes, up from 97.1 per cent in 2024.
Heathrow working with Ministers for third runway
Heathrow will submit its proposal for a third runway to the government this summer, following official backing for an expansion earlier this year.
Reeves has remained keen to get the planning application “signed off” in a bid to boost her economic growth mission.
But the airport has said significant policies are needed to make the project happen and it plans to work with Ministers to reform airspace, planning rules and the regulatory model.
The Civil Aviation Authority is expected to run a separate review of the expansion plans. Timelines are yet to be confirmed.
Heathrow will submit its H8 business plan in July, which outlines investment and pricing for the next regulatory period.
Thomas Woldbye, Heathrow’s chief executive, said: “We are on track for another strong year with the best punctuality amongst the major hubs in Europe, over £1bn of investment to improve the airport and growing passenger numbers despite macroeconomic uncertainty.
“We are doing it all with an airport charge that on a like-for-like basis is aligned with our European competitors.”