Heathrow6.45% S Regulatory News (88BX)

07.00 11th October 2016

Heathrow cargo soars in the wake of Britain's Brexit vote

§ Heathrow welcomed a record number of passengers in September, with 6.8 million travelling through the UK's only hub airport

§ Heathrow's cargo volumes surged 6% in September on the back of growth to East Asia and Latin America (Brazil up 18%, China up 13% and Mexico 7%). Heathrow is Britain's largest port, accounting for almost 30% of all UK exports by value outside the EU last year while Gatwick served only 0.2%

§ Emerging market passenger growth was also strong, with China up 7% and Mexico and India both up 5% - evidence that demand remains strong to fly from the UK's front door

§ Larger, quieter and more efficient aircraft continued to be a driver for growth in passenger volumes which were up 0.4% in September as airlines deploy more and more new generation Airbus A380s, A350s and Boeing 787s at Heathrow

§ The Scottish Government backed a third runway at Heathrow, joining the Welsh Government and the DUP in backing Heathrow expansion as the best option for all of Britain

§ An independent study from the University of Cambridge confirmed the Airports Commission's analysis that a third runway can be delivered within tough environmental limits

§ Heathrow announced plans to give Britain a 'Brexit Boost' with an additional 25,000 flights on existing runways from 2021 - four years before a third runway would open.

§ As well as adding vital extra capacity on existing routes, the end of EU regulation offers an opportunity to ring-fence some of the new slots for "Brexit Boost Routes" including new domestic connections such as Humberside, Dundee, Newquay or Liverpool and new long-haul trade routes to growth markets such as Osaka, Kochi, Wuhan and Quito. Heathrow also plans to boost domestic services by extending the £10 discount on all departing UK flights and bringing forward to 2021 £10m in start-up capital to support new UK routes

Heathrow CEO John Holland-Kaye said:

"The Prime Minister is clear that her Government will step up and do what's right for Britain.

"Expanding our country's largest port will give Britain's businesses the best connected trading network in the world. We'll show that we're confident about our future and determined to make a success of Brexit.

"We've had the debate on airport capacity, we've heard all the arguments and the independent evidence is conclusive - Heathrow expansion will make Britain stronger and fairer for everyone. Now is the time to make the right choice for Britain and back Heathrow."

Notes to Editors:

§ Cargo / air freight is critical to Heathrow's success in winning and sustaining long-haul routes for trade and passengers. Air freight is carried in the belly-holds of passenger planes

§ Heathrow is the largest UK port by value carrying over £100bn of cargo every year, more than the joint total from Felixstowe and Southampton, the UK's biggest shipping ports

§ As the Airports Commission report stated: "Heathrow is by far the largest and most important UK airport for freight". Compared to other UK airports, the Commission said that Heathrow is "better placed to accommodate high frequencies of less thick long-haul connections and … thus more attractive for freight handling. Another attractive feature of Heathrow for the freight sector is its central position on the strategic road network."

§ Only Heathrow has plans to significantly increase its cargo-handling capacity to exploit the opportunities that greater connectivity brings for British businesses trading with existing and new markets