Heathrow6.45% S Regulatory News (88BX)

07.00 10th November 2016

Heathrow cargo climbs 7% in wake of Government's backing for third runway

§ Heathrow welcomed 6.5 million passengers in October alongside a 7% surge in cargo volumes. Heathrow is Britain's largest port, accounting for almost 30% of all UK exports by value outside the EU last year

§ Cargo growth was particularly strong to fast-growing markets in Latin America and East Asia (Mexico up 28%, China up 21% and Brazil up 18%). Trade with India, the world's fastest growing large economy, also increased in October with cargo up 3.1% as the Prime Minister returned from her first bilateral overseas visit to forge a new global role for the UK

§ Emerging market passenger growth was also strong, with Mexico up 9.4%, East Asia up 2.8% and India up 2.1% - evidence that demand to fly from the UK's front door remains strong

§ Larger, quieter and more efficient aircraft continued to be a driver for growth in passenger volumes which are up 0.5% year-to-date in 2016 as airlines deploy more and more new generation Airbus A380s, A350s and Boeing 787s at Heathrow. Overall passenger volumes for October were down 1.2% over the same month last year due in part to cancellations stemming from Hurricane Matthew in the United States

§ In a major boost for the UK economy, the Government announced its support for a new runway at Heathrow - the first full-length runway in the south east since the second world war. The decision to back Heathrow and expand the country's biggest port underlined the UK's 'open for business' credentials. The Government will begin consulting on a draft national policy statement in early 2017

§ Britain's supply chain benefitted from an immediate boost following the Government's decision as Heathrow confirmed £50m of contracts would be issued before the end of 2017. 95% of Heathrow's procurement spend on expansion will be with the British supply chain, 60% of which will be outside London

§ Heathrow's Skills Taskforce - chaired by Lord Blunkett - held its inaugural meeting in October. The Taskforce is composed of experts drawn from business, unions and education and aims to deliver a third runway with a long-term skills legacy for local communities

Heathrow CEO John Holland-Kaye said:

"In October, the Prime Minister sent a clear message to the world that her Government would expand Heathrow, showing that Britain is open for business and confident in its future.

"With the support of communities across the UK, Heathrow is now working at pace to deliver the benefits of Britain's new runway - an affordable plan that creates more jobs, boosts exporters and builds an economy that is stronger and fairer for everyone - as quickly as possible."