BUSINESS NEWS
Heathrow targets 150m passengers with runway plan
Heathrow submitted its £49 billion plans for a third runway on August 1, describing the proposals as “100% privately financed” and “shovel-ready”, and including an easyJet pledge to launch flights from the airport if the runway goes ahead. A new 3,500-metre runway
will cost £21 billion, up from the previous estimate of £14 billion, a new terminal and stands will cost £12 billion, and expanding Terminal 2 and closing Terminal 3 will cost £15 billion. The new runway would require moving and widening the M25. In a statement, Heathrow said the runway and infrastructure “can
Thomas Woldbye
be ready within a decade. The full investment across terminals would take place over coming decades.” Chief executive Thomas Woldbye
noted: “We’re open to discussing with airlines how the runway might be shorter, but it [must] deliver the same operational and economic benefits.” Heathrow claimed expansion
would allow at least 30 new routes a day and up to 276,000 more flights a year, taking the annual total to 756,000, with passenger capacity rising from 84 million to 150 million.
Royal eyes ‘step change in growth’ as it posts $1.2bn quarterly profit
Royal Caribbean Group reported “strong close-in demand” as it posted a $1.2 billion net profit and $4.5 billion in revenue for the three months to June. Chief executive
Jason Liberty said “demand continues to accelerate” and forecast “another step change in growth” beyond 2027. He reported bookings at
higher rates than previously for this year and next, with strong demand “across all products and source markets”. Liberty added: “Digital channels are performing exceptionally well for
Jason Liberty
bookings and pre-cruise purchases.” Royal Caribbean capacity in the quarter was almost 6% up on 2024, with passenger numbers up 10% at 2.3 million, and yields higher due “both to ticket pricing and onboard spend”. Norwegian Cruise
Line Holdings also reported record revenue for the
second quarter but a $133 million fall in profit year on year to just $30 million despite an operating profit of $694 million and revenue rising 6% to $2.5 billion. The group blamed foreign exchange losses of $159 million for the decline.
Airlines surge but pressures mount Ian Taylor
British Airways’ parent IAG reported a strong first half of 2025 with “robust demand” driving an 8% rise in revenue year on year to €15.9 billion and a 43% increase in operating profit to almost €1.9 billion. BA’s first-quarter trading was
“particularly good, driven by very strong demand [and] reduced competitive capacity into Heathrow”. However, its second-quarter results
“reflected seasonal competitor growth [and] some weakness in US point-of- sale economy leisure demand”. IAG reported BA increased its
leisure capacity by 9% year on year for the April to June quarter. The group noted “some weakness in US point-of-sale economy
travelweekly.co.uk
demand” in the three months to June, with capacity on the North Atlantic up just over 1% year on year, but described overall demand in the North Atlantic, Latin American and European markets as “robust”. Lufthansa Group also reported
strong results, doubling its net profit for the three months to June to more than €1 billion, with “US demand strong despite the weakness of the dollar”. However, Lufthansa reported lower average fares in Europe due to “intensifying competition”. Chief executive Carsten
Spohr attributed the results to the “operational stability of our airlines”, but said 2025 remained a year of transformation “as delays in aircraft deliveries, certification and engine overhauls continue”. He added: “The burden due to EU regulations
continues to put us at a disadvantage.” Air France- KLM likewise posted
positive results, recording a group profit of €736 million for April to June as its revenue rose 6% year on year to €8.4 billion. Chief executive Ben Smith hailed
“solid revenue growth and improved margins” as passenger numbers rose 6% year on year and the group’s North Atlantic revenue rose 5% in line with a 5% increase in capacity, driven by “positive yield” in the front cabin. However, economy yields on
the North Atlantic fell year on year; an industry-wide capacity increase in the Caribbean produced “a more competitive fare environment and 2% decline in unit revenue”; Middle East capacity “was impacted by geopolitical tensions”; and short and medium-haul yields “remained flat”
Ben Smith
despite a 5% increase in capacity. KLM’s half-year revenue grew 6% on 2024. However, increased costs meant the airline recorded a €2 million loss, reinforcing the need for “structural savings”. Chief executive Marjan Rintel
blamed “internal and external causes – internally due to higher labour costs and operational problems, externally due to conflicts in the Middle East”.
14 AUGUST 2025 47
PICTURE: Christophe Leroux Airt France
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