Written evidence submitted by Heathrow Airport Limited


Promoting Britain Abroad – Call for Evidence

Digital, Culture, Media and Sport Committee

6 January 2022



Heathrow is Europe’s busiest airport and one of the world’s top international aviation hubs. As the UK’s global gateway and prior to the COVID-19 pandemic, Heathrow handled over 475,000 flights and welcomed more than 80 million passengers per year. The airport is home to more than 80 airlines, connecting passengers to more than 200 destinations around the world.


However, aviation has been one of the hardest-hit sectors of this pandemic and, for Heathrow, lockdowns, legally enforced travel bans, and border closures have led to almost 120 million fewer passengers over the last two years. Travel and tourism sectors will be among the slowest to recover to pre-pandemic levels, with Heathrow forecasting a return to 2019 passenger volumes only in 2026.


A recent CNN piece[1] explored the reasons for why inbound visitor numbers are not bouncing back for the UK as they are in nearby countries. The “perfect storm” of problems that are Government-inflicted as well as COVID-inflicted has resulted in the UK falling far behind its European competitors when it comes to the race to win back tourists.


Heathrow welcomes the opportunity to respond to the Digital, Culture, Media and Sport Committee’s call for evidence as part of its inquiry into ‘Promoting Britain Abroad’. Our key recommendations to ensure the successful delivery of the Government’s Tourism Recovery Plan are as follows:







Promoting Britain Abroad


Supporting the UK Aviation Sector’s Recovery


The implementation of the Global Travel Taskforce framework and the resumption of international travel in May 2021, was a welcome and positive step that has allowed the UK aviation sector to begin its long recovery from the devastating impacts of COVID-19.


However, despite this, the UK continues to lag behind its European competitors, topping the list in terms of flights lost (-1.3 million flights, -62%) compared to pre-pandemic levels for the second year running[2]. According to Eurocontrol, the UK is followed at quite some distance by Germany (-1.0 million flights, -50%), Spain (-742,000 flights, -44%), then France (-654,000 flights, -42%) and Italy (-616,000, -47%). In terms of the highest percentage of traffic loss, the UK also tops this list, jointly with Finland and Ireland, which all saw -62% lower traffic in 2021 than in 2019.


Figure 1 – Traffic loss across States, 2021 vs 2019

Source: Eurocontrol


As the UK’s only hub airport, Heathrow has represented a significant proportion of this impact across the UK aviation sector. For 2021, we anticipate a total of 20 million passengers, which is down 1.5 million on our June forecast and reflects the slower reopening of borders over the Summer. This remains 75% down compared to 2019 – and our cumulative losses from COVID-19 have grown to over £3 billion.


Restrictive rules on international travel have meant that the UK’s economic and aviation recovery continues to stall, and the UK becomes increasingly less attractive to international visitors compared to other European countries. The Government’s Tourism Recovery Plan outlines the objective to secure a swift recovery back to 2019 levels of tourism volume and visitor expenditure by the end of 2022 and 2023 respectively[3]. However, our forecasts show that Heathrow is unlikely to return to pre-pandemic volumes until 2026. Heathrow is also the UK’s largest port by value, with 95% of cargo so vital to Global Britain ordinarily flying in the bellyhold of passenger aircraft, meaning air freight and passenger traffic is dependent on each other to make the routes viable.


It is therefore vital that the Government continues to work towards safe and friction-free travel for fully vaccinated passengers - putting the vaccinated passenger right at the heart of an individual risk-based approach. This will allow greater freedom for people to safely travel internationally, reflects the success of the UK’s vaccination programme, and keeps the UK in line with European competitors. Maintaining a red list that focuses on Variants of Concern (VoC) will allow the Government to move quickly to protect public health, but the Government should review the requirements of red-list passengers, notable remove the need to quarantine in a Government-approved hotel.


Throughout the pandemic restrictions have remained in place for aviation, and sometimes only for aviation while the rest of the economy can operate close to business-as-usual. Where restrictions must remain in place to protect public health, the Government must provide the necessary levels of financial compensation to protect jobs and livelihoods across the country, and to ensure the sector remains ready to support the national recovery once restrictions are lifted. Within this package of compensation must be further support for high, fixed costs, such as business rates, that airports continue to bear. These costs have not changed throughout the period of the pandemic, and do not reflect the realities of the situation at Heathrow and many other airports around the UK.


Improving the experience at the border


Heathrow is Britain’s major gateway to the world, the country’s front door for tourists, students and investors. In 2019, 80 million passengers travelled through the airport - their first interaction is likely to have been with a Border Force official.


Whilst passenger levels have increased steadily over recent years, Border Force resourcing has not. As a result of historic Government cost savings, Border Force recruitment was frozen following the previous economic crisis, and while other Government Departments and agencies have received funding for additional staff due to the changing threat and risk dynamic, this has not included Border Force. This has meant Border Force are now playing catch up to ensure they have the sufficient number of officers manning desks at the border. Lack of resource and additional COVID-related checks routinely place strain on the border operation and there has been a parallel decline in performance. In November 2021, the longest queue time for Non-EEA passengers reached up to five hours.


Due to this historic reduction in funding and consequential lack of resourcing, local Border Force at Heathrow have been unable to maintain a basic level of service for passengers, resulting in excessive queuing particularly in peak periods. This regularly receives significant media and social media attention and has a major impact on the UK’s reputation globally and ultimately on the country’s economy as the UK becomes an increasingly less attractive place to visit, study, or do business.


Heathrow shares the Government’s ambition through its 2025 Border Strategy to have the world’s most effective border that creates prosperity and enhances security for a global United Kingdom. We are committed to working with the Government and Border Force to maintain a safe, secure and welcoming border, and to show that Britain is open for business. We would like to see a border where the lowest risk passengers are processed as quickly and as swiftly as possible through automation and the lightest touch, and where the highest risk passengers receive the closest possible scrutiny.


Nevertheless, with longest queue times already up to five hours to enter the country, the Government cannot afford to wait until 2025 to deliver vital improvements at the border. The Government must accelerate the digitisation of the border, truly harness automation and ensure reliability and stability of technology. Doing so would put the UK on the front foot, helping to make travel and trade more frictionless and seamless. However, failure to act now would present a serious situation at borders across the country, damaging the UK’s reputation as an attractive place to visit and do business as pictures of hours-long queues continue to be beamed around the world.


The Government must also give urgent consideration to resourcing across the entire Border Force structure. This includes improved rostering, recruiting officers with appropriate skills and capabilities, utilising the passenger data provided by airlines and airports, optimising planning and building in resilience.


Connecting the UK’s Nations and Regions


As the UK’s only hub airport, Heathrow’s role in providing vital links through the unique and extensive global route network we hold is extremely significant and crucial to ensuring the successful delivery of the Government’s Tourism Recovery Plan.


A hub airport is different to point-to-point airports as it aggregates passenger and cargo demand together across its hub and spoke network. Doing so means there is a greater choice of destinations at a higher frequency – particularly to long-haul destinations. There are only a handful of airports in the world that have more than 50 long-haul routes, in 2019 Heathrow was one of them. This hub connectivity is a real national asset. Protecting and strengthening it will help to maintain the UK’s status as a ‘soft power superpower’ as nations and cities around the world place enormous value on their access into Heathrow.


A strong hub model also means that regional airports in the UK are better connected via a convenient single transfer, to a vast range of long-haul destinations that are not viable for airlines to operate direct from those airports – given the combination of issues such as overall route economics and lower levels of catchment area.


With a vibrant domestic network and strong surface links spanning every nation and region, every part of the country benefits from a strong hub airport. Heathrow helps connect all of the UK to over 200 destinations across the globe, and our long-standing successful partnership with the VisitBritain and the GREAT campaign ensures we continue to showcase the best of Britain to millions of passengers passing through our terminals to encourage travel beyond London. Heathrow is also the front door to thousands of international students each year making their way to universities across the country. According to the Russell Group, international students at their universities generate around £10 billion per annum for the UK and fees paid are equivalent to 15% of their total income[4]. Without this strong network of connectivity, the UK is a much less attractive place to visit, study or do business.


Even throughout the devastating impact of the COVID-19 pandemic – when previously restrictive Heathrow capacity has become available on a temporary basis due to slot waivers put in place – various new and relaunched domestic services have been established due to the unprecedented value a Heathrow connection represents.


Of the busiest UK domestic routes with over 500,000 passengers per year, five of these were to/ from Heathrow – with four of these routes connecting with other UK nations in Northern Ireland and Scotland. The connections Heathrow offers to Northern Ireland and Scotland represented 73% of all Heathrow’s domestic passengers in 2019 - at over 3.5 million - with 1.2 million connecting passengers utilising the hub connectivity we offer. We sit at the heart of Union Connectivity.


As such, maintaining the UK’s strong domestic network and the onward connections provided by the hub, should be an important priority of Government decision making. Without this, parts of the country will be solely reliant on their connections to other European hub airports for access to the rest of the world.


Air Passenger Duty (APD) is the single biggest lever the Government can pull to encourage airlines to restart routes. Research conducted by Frontier Economics in 2017[5] outlined that in a pre-Covid market environment, a 100% cut in domestic APD could cut the cost of air travel for passengers between Heathrow and the UK’s nations and regions by around £24 million per annum, and £12 million under a 50% cut scenario.


In turn, this would stimulate an 8% increase in point-to-point demand on Heathrow’s domestic routes under the 100% reduction scenario – equating to around 75,000 more round trips per year to and from Heathrow. Under the 50% reduction scenario, there would be a 4% increase in demand, the equivalent of 37,000 additional trips. Broken down, this also means routes like Aberdeen and Belfast (where no viable or practical alternative transport mode is available to London) could see a 10% and 12% reduction in ticket fares respectively, and an average increase in passengers of between 7-8%.


Alongside this measure, more should be done to review the role Government can play in protecting lifeline routes into Heathrow through Public Service Obligations (PSOs) and Regional Connectivity Fundswhich are vital in connecting remote corners of the UK with no viable alternative mode of transport, to our vast global network. At present, PSOs are specified by the cities they link rather than individual airports. In a globalised world, such an approach is not adequate – as regions and cities are more concerned with how to connect with global growth, attract inbound tourism and boost exports.


Whilst Heathrow provides significant air connectivity benefits to nations and regions of the UK, we have always championed the concept of “the right mode for the right journey”. Sustainable and resilient surface connections play a key role in connecting the UK and ensuring our passengers are able to deliver on this concept – and as the UK’s best-connected transport hub, our passengers can reach the airport by tube, train, coach, bus or car.


As such, Heathrow believes the Government should place greater emphasis on supporting and delivering clear tangible Union Connectivity projects, such as Western Rail to Heathrow. This vital project would significantly improve rail connectivity between Heathrow and the South Coast, South West, South Wales and West Midlands enhancing connectivity, cutting down journey times and taking cars off the road. The implementation of Western Rail would see journey times between Heathrow and Cardiff cut by around 30 mins, and Heathrow-Exeter cut by 40 minutes. These surface access improvements would make it much more attractive for visitors to venture further afield from London and explore the best that Britain has to offer.


The Tourism Recovery Plan points out that variety of places, somewhere new, countryside and natural beauty, and ease of getting around are among the top five motivators for visiting Britain[6]. Ensuring the UK’s nations and regions are adequately connected to Heathrow – as the UK’s hub airport – will be critical in delivering on the Plan’s objective to share the benefits of inbound tourism across the whole country[7].


Re-establishing the UK as a world-renowned shopping destination


The UK has long been a world-renowned destination for retail. Passengers had awarded Heathrow the ‘World’s Best Airport for Shopping’ Skytrax title for a record-breaking 11 consecutive years, with retail at the airport supporting more than 10,000 jobs. However, the Government’s decision to withdraw tax-free shopping for international visitors has had a devastating impact across the country with the EU moving quickly to capitalise, and countries such as France and Ireland immediately expanding their tax-free shopping eligibility by cutting the minimum spend requirements, recognising it will make them more attractive to travellers.


The UK has become the only country in Europe not to offer tax-free shopping to international visitors – putting thousands of jobs at risk across the UK, and inflicting irreversible damage on the retail, hospitality and travel sectors. Despite forecasting a full-year profit before tax of approximately £151m, Dixons Carphone recently announced that it will permanently close all of its UK airports stores after 30 years in the travel retail industry, citing the decision to end tax-free shopping as factor[8]. Shoppers now have the below offering across major European countries, with the UK at a very clear disadvantage.


VAT High Street

Cost Saving, Tax-Free

VAT Airside

Cost Saving, Airside



20% (minus admin)





22% (minus admin)





21% (minus admin)










While tax-free shopping is a small part of all spending by international visitors, it is crucial in attracting them to the UK in the first place and they go on to spend billions on other taxed goods and services, such as hotels, restaurants, travel, taxed shopping and culture. Despite the Tourism Recovery Plan acknowledging that ‘good deals’ is a top consideration for prospective visitors to Britain[9], it fails to reference the benefits that a competitive tax-free shopping regime can bring to attracting tourists from around the world. A Global Blue poll of 3,000 high-spending travellers from the Middle East, China and the Far East, conducted the week after the decision was announced shows the impact, with 60% saying they would not still visit if tax-free shopping was abolished – equating to approximately 2.7 million fewer visits to the UK, missing out on the £1,600 average spend of each of these visits[10] – and 93% saying they would not still buy goods here.


The Government must act to ensure the UK maintains its competitive advantage over its European neighbours, by introducing a new digital VAT refund scheme and a new airside tax-free shopping regime. The reopening of international travel presents another opportunity to attract more international visitors and also divert sales away from the EU. Not just with a more competitive tax-free shopping regime but also with the introduction of duty-free stores in arrivals areas at the UK’s international airports, ports and rail stations.


Introducing arrivals duty-free stores will create jobs across the UK and allow travel hubs to generate further income independently of the Government – all without a negative impact on the domestic market or to Crown revenue. It is anticipated that sales will primarily be diverted from airports abroad, and it would allow UK industry to enjoy the benefits of the recent inbound duty-free allowances increase, which are currently benefiting foreign airports.


Based on research by York Aviation, arrivals duty-free stores are expected to increase passenger spend at UK airports by 20-30%, which would be of significant benefit to airports, particularly regional airports which are much more reliant on revenue from retail than larger airports.


UK airports and retailers have seen business decline as a result of competition from an increasing number of countries that have arrivals duty-free in place, these include Dubai, Singapore, Australia, New Zealand, Norway, Switzerland, Iceland, Turkey and Brazil. The introduction of duty-free arrival stores would increase UK competitiveness, creating a more level playing field against overseas competitors in attracting and capitalising on international tourism.



[1] CNN https://edition.cnn.com/travel/article/uk-tourism-decline-restrictions-cmd/index.html

[2] Eurocontrol, Aviation Intelligence Unit Think Paper #15 – 1 January 2022 (page 3) https://www.eurocontrol.int/sites/default/files/2022-01/eurocontrol-think-paper-15-2021-review-2022-outlook.pdf

[3] Department for Digital, Culture, Media and Sport, Tourism Recovery Plan (page 17) https://www.gov.uk/government/publications/tourism-recovery-plan

[4] Russell Group - The value of international students at Russell Group universities https://www.russellgroup.ac.uk/media/5521/rg-international-students-june-2017.pdf

[5] Frontier Economics, The Benefits of Reducing Domestic APD, September 2017 https://www.frontier-economics.com/media/2245/benefits-reducing-domestic-apd.pdf

[6] Department for Digital, Culture, Media and Sport, Tourism Recovery Plan (page 12) https://www.gov.uk/government/publications/tourism-recovery-plan

[7] Department for Digital, Culture, Media and Sport, Tourism Recovery Plan (page 17) https://www.gov.uk/government/publications/tourism-recovery-plan

[8] The Guardian, Dixons Carphone to close all airport stores after tax-free shopping scrapped https://www.theguardian.com/business/2021/apr/28/dixons-carphone-to-close-all-airport-stores-after-tax-free-shopping-scrapped

[9] Department for Digital, Culture, Media and Sport, Tourism Recovery Plan (page 12) https://www.gov.uk/government/publications/tourism-recovery-plan

[10] VisitBritain Inbound Tourism Data https://www.visitbritain.org/inbound-tourism-trends