Heathrow warns that the cap on air fares will hit revenues next year

London Heathrow expects turnover and profit to decline next year, even though the airport expects to be able to handle more than 2 million extra passengers.

Britain's largest airport expects 81.4 million travelers in 2024, a 2.9 percent increase on the 79.1 million expected to arrive through its terminals this year, as air travel recovers from lockdown .

However, it predicts sales will fall 6.1 percent to £3.45 billion and adjusted pre-nasties profits will fall 16.1 percent to £1.89 billion in 2024.

The British Airways hub blamed the expected financial results on the Civil Aviation Authority's decision to reduce the maximum amount airlines can charge for each passenger they carry from £31.57 to £26.74.

As a result of the cap, Heathrow expects aviation revenues to fall by 11.3 percent to £2.1 billion, offsetting expected growth in non-aeronautical revenues.

By comparison, Heathrow forecasts revenues will rise by more than a quarter this year thanks to a strong recovery in traffic, especially in the Asia-Pacific region, where travel restrictions were only significantly eased earlier in 2023.

Passenger numbers rose 30 percent to 72 million in the first eleven months of 2023, with 6.1 million flying in November alone, just below pre-pandemic levels.

Heathrow has complained that the CAA cap on passenger charges will lead to lower investment and poorer customer service.

The group's arrival punctuality has fallen slightly this year due to airspace congestion, adverse weather conditions and air traffic controller strikes in Europe.

Nevertheless, the airport plans to increase capital expenditure by half to £936 million next year, with some of the funding going towards installing new security lanes, renewing runways and refurbishing cargo areas and main tunnels.

The latest prospects come amid suggestions that the Saudi sovereign wealth fund could become the majority shareholder of Heathrow Airport.

The Public Investment Fund has teamed up with private equity investor Ardian to buy a 25 percent stake worth £2.4 billion in Heathrow from Spanish transport company Ferrovial, with the PIF stake totaling 10 percent.

But according to the Sunday Times another major investor in Heathrow is about to sell its stake to the PIF, as more people consider following suit.

Heathrow's shareholders include sovereign wealth funds based in China, Qatar and Singapore, leading Australian and Canadian pension funds and the UK's Universities Superannuation Scheme.

The PIF owns Newcastle United in the Premier League, manages the LIV Golf Series and recently acquired a 49 percent stake in Rocco Forte Hotels.