UK. London Heathrow Airport today reported its results for the first six months of 2017, with retail revenue increasing by +11.8% year-on-year to £313 million. The key figure of retail revenue per passenger rose by a healthy +7.6% to £8.43, with stronger than average growth in the second quarter of +8.7%.

Passenger traffic growth of +3.9% (to 37.1 million) contributed to the solid retail performance, as did the depreciation of Sterling since June 2016, particularly in duty and tax free and airside specialist shops, noted Heathrow Airport. Duty and tax free income climbed by +12.9% while airside shops posted a sharp +23.5% rise. The redevelopment of Terminal 4’s luxury retail offering, completed in late 2016, also contributed to growth, said the airport company.

The retail contribution to total Heathrow revenue (top) and how the retail performance broke down in the half (above)

F&B also saw strong revenue growth of +18.2%, driven by increased passenger traffic, the redevelopment of Terminal 5 dining outlets and more passengers choosing to buy food from terminals before boarding their flights, according to Heathrow.

The completion of major retail projects at T4 and T5 (pictured) has delivered strong incremental commercial gains, said Heathrow

Heathrow Airport said that the benefits of investment in T4 and T5 retail redevelopment and in new car parking capacity were now flowing through strongly, “with over £250 million secured out of the £300 million incremental commercial revenue target set for the period to the end of 2018”.

Bureaux de change revenue was flat while car parking revenue grew by +5.5% year-on-year.

H1 2017 key financials for Heathrow Airport

In the six months ended 30 June, total Heathrow revenue increased by +4.1% to £1,374 million. Adjusted EBITDA (EBITDA including certain exceptional items) improved by +6.9% to £835 million, which “reflected renewed strengthening of retail momentum,” said Heathrow. Pre-tax profit climbed by +36% to £102 million.

Commenting on a record traffic performance in the half, the airport company said that this was propelled by “more resilient macro-economic conditions and airline stimuli to boost demand”.

Intercontinental traffic was the key driver of traffic growth, increasing +4.7%, with particularly robust increases to and from the Middle East (+13.1%). This was the result of more flights and larger aircraft, including additional A380 services from Emirates, Etihad and Qatar Airways and British Airways’ relaunched Tehran service in 2016.

The +5.7% rise in Asia Pacific traffic was driven by substantial growth in load factors on existing routes serving Malaysia, Thailand and Singapore and new or increased services to Indonesia, Philippines and Vietnam. North American traffic recovered from a slow first quarter to outpace last year’s traffic volume by +1.6%. Latin American traffic grew +4.1%, due to more flights and fuller aircraft serving the region. European passenger volumes increased by +3.1% with notable growth on routes to Belgium, Portugal, Denmark, Italy and Russia.

The passenger traffic performance by region in the half