Final Results

RESULTS FOR THE YEAR

ENDED 31 DECEMBER 2025

UK's hub flying high with record passenger numbers: 2025 was Heathrow's busiest year to date, with colleagues welcoming over 84.5 million passengers, securing our position as Europe's busiest hub airport. Further incremental growth is forecast for 2026, with the airport on track for an uplift to 85 million passengers. Demand continues to outpace the limits of the airport's current infrastructure reinforcing the need for expansion.

Operational performance outpaces European competitors: Heathrow was crowned the most punctual hub in Europe in 2025, consistently outperforming all major hub airports. Over 4.2 million more passengers flew on time compared with 2024 and baggage and security performance continued to strengthen. 97.3% of passengers waited less than five minutes for security and baggage load rates were close to 99% resulting in smoother, more reliable journeys for passengers.  

Investment unlocked for 2026: £1.3 billion will be spent over the coming year in capital investment programmes. This will kickstart work to revamp Terminal 4 ('T4'), progress with the new baggage system design for Terminal 2 ('T2') and drive improvements to services for passengers with accessibility needs, all of which will contribute towards making Heathrow more user-friendly and resilient for our customers. 

Expanding Heathrow: Expansion at Heathrow is the Government's flagship infrastructure project to drive long-term economic growth and shareholders recently approved new investment to begin work on the planning application, marking a significant step forward for the project. However, delivering the project remains complex. It can only proceed once the necessary regulatory and policy frameworks are firmly in place to enable the next phase of delivery. To deliver the full benefits to customers and the country and to ensure it is fully privately financed, the Civil Aviation Authority ('CAA') must put in place the framework that gives investors confidence. Decisions on these key issues are expected throughout 2026. This includes in the autumn when Parliament will be asked to vote on the final Airports National Policy Statement ('ANPS') - a decision which will enable Development Consent Order ('DCO') approval by 2029. The first flights from a third runway could be in a decade. 

Financial performance: Heathrow reported increased revenue of £3.6 billion but a flat adjusted EBITDA of £2.0 billion, as the benefit of higher passenger numbers was offset by lower airport charges set by the CAA, increased maintenance costs and the expenditure needed to support operational performance. Our improved workforce planning has made a positive impact on employment costs, however maintaining the ageing asset base is demanding an increased spend. We continue to maintain a strong financial position with liquidity of £2.9 billion. Heathrow's Board decided to pay dividends totalling £550 million to the ultimate shareholders during the financial year, the first time in 5 years.

Sustainability:  Progress continues towards our sustainability commitments. In 2025, we stepped up our industry-leading SAF incentive programme, with record amounts of Sustainable Aviation Fuel ('SAF') used at Heathrow. Our 2026 goal looks to go further, with the aim to reach 2% above the UK mandate - totalling 5.6% SAF usage at the airport. We launched our Resources and Waste Strategy, setting clear targets to increase recycling and reduce waste across the airport and we continued to implement our Noise Action Plan, reducing the impacts of night flights and providing noise insulation to local homes.

"Last year everyone at Heathrow rallied behind our ambition to deliver exceptional operational performance for our customers. Not only did we meet that goal, we surpassed it and achieved record-breaking service levels. With strong foundations in place and with the airport now operating very close to capacity, the next chapter is crucial to our success. Expansion will unlock significant economic benefits and create an extraordinary airport, fit for the future. In 2026, we'll continue progressing our plans so we can deliver for both our customers and for the country."

Thomas Woldbye | Heathrow CEO 

Notes

(1) EBITDA (2025: £1,941 million, 2024: £2,160 million) is profit before interest (net finance costs), taxation, depreciation, amortisation and exceptional items (if any). Adjusted EBITDA is profit before interest (net finance costs), taxation, depreciation, amortisation, fair value gains and losses on investment properties and exceptional items (if any).

(2) Adjusted profit before tax excludes non-cash fair value gains and losses on investment properties and financial instruments and exceptional items (if any).

(3) Consolidated nominal net debt is short and long-term debt less cash and cash equivalents and term deposits. It includes index-linked swap accretion and the hedging impact of cross-currency interest rate swaps. It excludes pre-existing lease liabilities recognised upon transition to IFRS 16, accrued interest, bond issue costs and intra-group loans.

(4) Alternative Performance Measures ('APMs'): the performance of the Group is assessed using a number of APMs, including adjusted EBITDA, adjusted profit before tax, consolidated nominal net debt and the Regulatory Asset Base. Management believe that APMs provide investors with an understanding of the underlying performance of the Group. A reconciliation of our APMs can be found in note 16.

(5) The Regulatory Asset Base ('RAB') is a regulatory construct, based on predetermined principles not based on IFRS. It effectively represents the invested capital uplifted by inflation on which we are authorised to earn a cash return.

(6) Changes in passengers are calculated using rounded passenger numbers.

Heathrow (SP) Limited is the holding company of a group of companies that fully own Heathrow airport and together with its subsidiaries is referred to as the Group. Heathrow Finance plc, also referred to as Heathrow Finance, is the parent company of Heathrow (SP) Limited.

Disclaimer

These materials contain certain statements regarding the financial condition, results of operations, business and future prospects of Heathrow. All statements, other than statements of historical fact are, or may be deemed to be, "forward-looking statements". These forward-looking statements are statements of future expectations and include, among other things, projections, forecasts, estimates of income, yield and return, pricing, industry growth, other trend projections and future performance targets. These forward-looking statements are based upon management's current assumptions (not all of which are stated), expectations and beliefs and, by their nature are subject to a number of known and unknown risks and uncertainties which may cause the actual results, prospects, events and developments of Heathrow to differ materially from those assumed, expressed or implied by these forward-looking statements. Future events are difficult to predict and are beyond Heathrow's control, accordingly, these forward-looking statements are not guarantees of future performance. Therefore, there can be no assurance that estimated returns or projections will be realised, that forward-looking statements will materialise or that actual returns or results will not be materially lower than those presented.

All forward-looking statements are based on information available at the date of this document. Accordingly, except as required by any applicable law or regulation, Heathrow and its advisers expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained in these materials to reflect any changes in events, conditions or circumstances on which any such statement is based and any changes in Heathrow's assumptions, expectations and beliefs.

These materials contain certain information which has been prepared in reliance on publicly available information (the 'Public Information'). Numerous assumptions may have been used in preparing the Public Information, which may or may not be reflected herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on the position or results shown by the Public Information. As such, no assurance can be given as to the Public Information's accuracy, appropriateness or completeness in any particular context, or as to whether the Public Information and/or the assumptions upon which it is based reflect present market conditions or future market performance. The Public Information should not be construed as either projections or predictions nor should any information herein be relied upon as legal, tax, financial, investment or accounting advice. Heathrow does not make any representation or warranty as to the accuracy or completeness of the Public Information.

All information in these materials is the property of Heathrow and may not be reproduced or recorded without the prior written permission of Heathrow. Nothing in these materials constitutes or shall be deemed to constitute an offer or solicitation to buy or sell or to otherwise deal in any securities, or any interest in any securities, and nothing herein should be construed as a recommendation or advice to invest in any securities.

This document has been sent to you in electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither Heathrow nor any person who controls it (nor any director, officer, employee nor agent of it or affiliate or adviser of such person) accepts any liability or responsibility whatsoever in respect of the difference between the document sent to you in electronic format and the hard copy version available to you upon request from Heathrow.

Any reference to 'Heathrow' means Heathrow (SP) Limited (a company registered in England and Wales, with company number 6458621) and will include its parent company, subsidiaries and subsidiary undertakings from time to time, and their respective directors, representatives or employees and/or any persons connected with them.

These materials must be read in conjunction with the Heathrow (SP) Limited annual report and financial statements for the year ended 31 December 2025.

Review of the year

2025 was a year of strong delivery and progress for Heathrow as we showed what focused investment, disciplined execution and a relentless commitment to our customers can achieve. Against a backdrop of continued global uncertainty, our teams delivered resilient operations, improved passenger outcomes and built momentum behind our long-term growth ambitions. These results reinforce Heathrow's role as a critical national asset and one of the world's leading hub airports.

Operationally, our performance in 2025 was among the strongest in our history and underscores the tremendous value we provide our customers. We were proud to be recognised as the most punctual hub in Europe, while also ranking in the top 5 per cent of airports globally for passenger satisfaction and the most connected airport in the world for the third consecutive year. This reflects sustained improvements in reliability, service quality and on-the-day delivery, driven by closer collaboration with our airline partners and the dedication of our frontline colleagues. As passenger demand to fly from Heathrow hit a new record high, we proved that we can deliver both scale and service excellence.

A cornerstone of this progress was £1.3 billion of new investment across the airport, targeted in areas that matter most to passengers and airlines. Most notably, Heathrow became the largest airport in the world to fully roll out next-generation security scanners, enabling passengers to keep liquids and laptops in their bags. This has transformed the security experience, reducing queuing and improving resilience to a new global benchmark for passenger convenience while maintaining the highest safety standards.

We have maintained robust financial resilience over the course of 2025. Our financial position remains strong with overall liquidity standing at £2.9 billion. Revenue has increased to £3.6 billion with adjusted EBITDA consistent with 2024 at £2.0 billion, as the higher aeronautical revenue from growing passenger numbers was offset by lower airport charges set by the CAA, higher costs to maintain an ageing asset base and the expenditure needed to support our operational performance.

We also made important strides in shaping Heathrow's future. During the year, we submitted a compelling business plan to the CAA for our next regulatory period. Our proposals are designed to deliver more resilient operations, unlock growth opportunities for airlines and provide a better airport experience for our passengers, all at an affordable price. Alongside this, we welcomed the UK Government's backing for Heathrow's expansion, and we are now focussed on progressing the detailed work required to secure planning permission by 2029.

We are on a journey to make Heathrow an extraordinary airport, fit for the future. 2025 has shown that we can perform strongly today whilst laying the foundations for tomorrow - a more resilient, more efficient and more competitive hub airport for the UK. I want to thank our colleagues, airline partners and stakeholders for their continued commitment and collaboration, and I am excited about what we can achieve together in the years ahead.

Thomas Woldbye - Heathrow CEO

STRATEGIC UPDATE

Our strategy gives us a clear direction and sets the path to achieving our vision, "to be an extraordinary airport, fit for the future." We have three Foundations, our non-negotiables that underpin everything we do and six business priorities, our Beacons, that will help us become extraordinary. This strategic framework will enable our continued success and future growth. The following section summarises each of the six beacons for the year ended 31 December 2025. For the complete picture and associated case studies, please refer to the 2025 Annual Report.

Winning Team

Our Winning Team beacon supports Heathrow's vision by fostering an engaging and inclusive culture that enables our colleagues to achieve their full potential, our teams to perform at their best, and our business to attract and retain the diverse talent we need now and in the future.

In 2025, we launched a new People strategy to ensure that everyone working with us gets the very best experience at Heathrow. The People strategy is built around our three Winning Team enablers: An Extraordinary Place to Work, Performance Culture and Future Skills and Capability. It is founded on our core commitment to get Everyone Home Safe and Well. We reshaped our employee value proposition and defined a new ambition to make Heathrow an extraordinary place to work and worked to strengthen our inclusive culture in 2025, supported by our five diversity networks, including Altitude winning Outstanding Women's Network of the Year.

In the November 2025 survey, 70% of colleagues said Heathrow is a great place to work, up three points from 2024. We also invested in future capability through the National Careers Week roadshow, one‑to‑one support from 130 career champions and the work of our Future Skills team, which delivered a future learning strategy, leadership development, and strategic workforce plans. All colleagues completed inclusion training, more leaders joined inclusive leadership sessions, and we piloted reverse mentoring to strengthen understanding of frontline challenges. In the November 2025 survey, 67% agreed Heathrow is inclusive for all, up from 66%, and we're implementing an action plan to accelerate progress.

Focus to go Faster

The Focus to go Faster beacon promotes our commitment to improving Heathrow's effectiveness by delivering more, faster, and with greater efficiency. In 2025, we streamlined processes and improved resource allocation, including removing paper‑based timesheets and introducing digital tap‑in platforms to enable faster, more flexible deployment for frontline colleagues.

We accelerated progress across capital and operational programmes through better tracking of efficiency and productivity. Under our asset and compliance programme, Southern airfield resurfacing was completed on schedule, Northern airfield upgrades began with minimal disruption, and cargo tunnel refurbishment improved reliability and passenger transfer efficiency.

Operationally, we introduced technologies and systems aimed at optimising aircraft turnaround at Terminal 5 ('T5') and priority stands, enabling faster and more predictable turnarounds. Enhanced flight data messaging increased airspace capacity and reduced delays, improving crew and asset alignment. Additional resilience and capacity were delivered to T4's baggage system a year ahead of plan and T2 advanced with an agreed design for the new baggage system, supported by targeted projects to reduce IT and operational risks. A major milestone was the rollout of CTiX security technology across all terminals through the Next Generation Security programme, improving screening efficiency, strengthening resilience and reducing costs.

Value for Customers

The Value for Customers beacon reflects our commitment to delivering great passenger service and creating value for all customers. In 2025, we advanced this through our customer‑led H8 Business Plan submission to the CAA, outlining £10 billion of privately financed investment for 2027-2031 to deliver better resilience, better passenger experience, better use of new and existing capacity and better sustainability. 

Operational excellence defined the summer of 2025. Heathrow achieved industry leading punctuality, earning recognition as Europe's most punctual hub airport. Heathrow remained OAG's[1] Most Connected Airport for the third year and expanded its network with new routes. Passenger experience continued to improve with new retail and dining options in T5, along with upgrades such as the refurbished Windsor Suite and new lounges. Beyond the terminals, we began our largest redevelopment in 20 years, creating new logistics hubs at Eastern Business Park and Epsom Square to support small and medium‑sized businesses. Accessibility was a defining theme with 2.3 million assistance requests, more than any other European airport. We responded with initiatives like the Independent Journeys Project and active participation in the Aviation Accessibility Task and Finish Group setting new standards for inclusive travel.

Digital Future

The Digital Future beacon reflects Heathrow's commitment to using digital capabilities and innovation to improve productivity, efficiency and the passenger experience. In 2025, we advanced this journey by appointing a Data and AI Director and a Digital Transformation Director to the Senior Leadership Team and by building new teams dedicated to delivering our Digital Future ambitions. A search for the new Chief Digital & Information Officer is ongoing. Our goal is that by 2031, Heathrow will be fully digitally integrated, supported by trusted, actionable data that enables a resilient, efficient and enjoyable airport for everyone. This work will be delivered through a comprehensive roadmap designed to unlock Heathrow's potential and support the next phase of growth.

In 2025, we improved the digital passenger experience through initiatives such as Pay in Advance for Reserve and Collect retail, Single Sign On for smoother access and the deployment of Hallie, our generative AI customer service agent that resolves most passenger queries. We also launched a new tailored travel guide, designed to support passengers with accessibility needs in planning and preparing their journey through Heathrow. More airlines were also onboarded onto automated self-service bag drop and check-in systems.

We strengthened internal digital capability by embedding data and technology into operations to support smarter decisions and easier journeys. Key finance processes have also been automated to improve efficiency.

People and Planet

We put people and planet at the heart of what we do, guided by our sustainability strategy, Connecting People and Planet, which sets 2030 goals and targets to drive progress towards Net Zero Aviation and Making Heathrow a Great Place to Live and Work. It is underpinned by Responsible Business Foundations that strengthens our ability to operate a resilient, efficient and sustainable airport.

We are investing in carbon and sustainability improvements as part of our H7 business plan and our H8 business plan includes further investments, subject to regulatory approval, to accelerate decarbonisation and strengthen climate resilience. 

We are currently working on refreshing our "Connecting People and Planet" strategy.

For more information about activities in the year, see the 'Business Update' section.

Creating Capacity

The Creating Capacity beacon reflects Heathrow's short, medium and long-term strategy with a focus on maximising capacity through current infrastructure, modernising and upgrading the airport.

In 2025, Heathrow made significant strides in delivering the Creating Capacity beacon, responding to record demand whilst operating close to the limits of our current infrastructure. Although Heathrow remains subject to an Air Traffic Movement ('ATM') cap of 480,000 movements per year, passenger growth has continued. In 2025, the airport served 84.5 million passengers however, further growth through larger or fuller aircraft is now significantly limited by terminal capacity.

Through our Efficient Use of Existing Assets workstream, Heathrow has increased capacity by improving efficiencies across terminals and key passenger touchpoints. As a result, we have updated our declared annual capacity to 85 million passengers for 2025, representing a 3 million uplift from 82 million. This has been achieved through process improvements, data‑led identification of bottlenecks and strong collaboration with airline partners. Key achievements include enhanced automation in T2 increasing check‑in throughput by 15%. Early delivery of new Hold Baggage Screening machines has doubled screening capacity for T4 and improved passenger flow in T3 and T5, reducing crowding during peak summer periods. These actions have enabled Heathrow to handle record passenger volumes while operating at 99 per cent runway capacity, maintaining resilience and service levels.

Business Update

In assessing our performance for the year ended 31 December 2025, we have outlined key performance metrics that illustrate our progress. The glossary section of this report provides detailed definitions for each indicator.

Passenger traffic

(1) For the year ended 31 December.

(2) Calculated using unrounded passenger figures

(1) For the year ended 31 December.

(2) Calculated using unrounded passenger figures

(3) Cargo tonnage includes mail volumes

In 2025, Heathrow welcomed 84.5 million passengers, an increase of 0.7% from 2024 (83.9 million) supported by a record number of seats of more than 105 million. More flights, larger aircraft and new routes have enabled Heathrow to remain Europe's busiest hub and the world's "most connected airport"[2]. In August, Heathrow became the first European Airport to exceed 8 million passengers in one month and, for the first time, every month of the summer season exceeded 7 million passengers. 

Growth at a market level was mixed due to slot changes during the year. Despite this, the Middle East, Asia Pacific and Africa all achieved growth of over 2%, underpinned by the launch of new services from entrant airlines Riyadh Air, IndiGo and Air Peace. North America has remained resilient despite several headwinds in the US with Canada seeing 4.6% passenger growth compared to last year driven by new routes and increased capacity. Meanwhile, UK volumes were impacted by a decline in domestic transfers linked to other surface transport options and passengers transferring through other airports.

Seat factors decreased modestly year on year (0.5%), reflecting the introduction of additional seat capacity.

Despite the challenging economic backdrop, cargo tonnage grew by 0.8% supported by the rise in wide-body passenger aircraft movements.

Service and operational performance

(1) For the year ended 31 December.

In 2025, we achieved an overall ASQ rating of 4.05 out of 5.00, a notably positive change compared to 2024 (3.98) notwithstanding the increase in passenger numbers. Overall, 77% of passengers surveyed between January and December 2025 rated their Overall Satisfaction with Heathrow as either 'Excellent' or 'Very Good' (2024: 74%). The proportion of 'Poor' ratings remained low at only 0.6% (2024: 1%). 

Compared to 2024, all satisfaction metrics were maintained or improved, with uplifts particularly evident in 'Security', attributed to the roll out of Next Generation Security Scanners. 'Ease of Making Connections with Other Flights' also substantially outperformed its 2024 level. Other notable performance gains included 'Availability of Charging Stations', 'Entertainment and Leisure Options', and 'Walking Distance'.

Operationally, we outperformed across all our service standard indicators during our busiest year. Security performance continued to improve year on year, with 97.3% of direct passengers (2024: 92.6%) passing through Central Search Areas in under five minutes, despite the operational challenges posed by the implementation of our Next Generation Security programme. Improved operational performance across the airfield is reflected in the punctuality outcomes with arrival punctuality outperforming departures. However, overall punctuality continues to be impacted by airspace congestion and adverse weather events. Baggage performance improved with greater system resilience despite the increased passenger volumes.

People and Planet Carbon 

In 2025, we continued to advance Heathrow's journey toward net zero in the air and on the ground. In the Air emissions were on track, reporting 7% below 2019 despite record passenger numbers, supported by more efficient fleets and increased use of SAF. SAF uptake reached 3.1% of fuel uplifted, avoiding over 600,000 tonnes of CO2e. Policy momentum also strengthened, with the Government's SAF Mandate commencing from January, and the SAF Bill progressing through Parliament. The Bill underpins the introduction of a Revenue Certainty Mechanism designed to give producers long‑term price certainty and unlock investment in UK SAF production. On the Ground emissions remained 18% below 2019 but rose year-on-year, driven primarily by supply chain emissions linked to increased capital investment. Decoupling emissions from infrastructure growth is a key challenge. To address this, we commissioned a major study to understand the drivers of underperformance and identify opportunities to course correct. We strengthened our Carbon Management Standard to embed low-carbon principles into future projects. Surface access emissions decreased by 5% year-on-year through continued investment in our Sustainable Travel Zone, including improved long distance coach services. However, improvements in data quality and methodology are expected to result in an increase in reported surface access emissions in future. These Scope 3 data improvements will give us a clearer understanding of our footprint and support more informed decisions about where our investments and actions can deliver the greatest benefit. These updates will be considered as part of a planned refresh of our Net Zero Plan. 

Great Place to Live and Work  

Improving the quality of life for our communities and colleagues is at the heart of our ambition to be an extraordinary airport, fit for the future.

We continued comprehensive air quality monitoring at and around the airport, building on the significant improvements achieved over the past decade.

We are implementing our Noise Action Plan to reduce impacts on our neighbours by incentivising the use of quieter planes, developing quieter operating procedures, reducing the impacts of night flights and providing noise insulation to eligible homes. In 2025, we achieved 207 nights without flights between 23:30 and 04:30, an improvement from 189 in 2024.

Even as passenger numbers continue to grow, we aim to drive waste reduction through material avoidance and increased reuse, recycling and recovery. Our new Resources and Waste Strategy, published in 2025, sets clear quantitative targets to reduce waste and increase recycling across airport operations, airlines and construction activities by 2035.

We give back to our neighbours through local projects, partnerships and colleague volunteering supporting schools, nature and communities. Our Giving Back programme benefitted over 172,000 people in 2025, with colleagues contributing over 6,800 volunteer hours. 

Capital expenditure

In 2025, £1,274 million (2024: £1,122 million) of capital expenditure was incurred, including £59 million in capital creditors movements (2024: £58 million).

We continue to make strong progress on our H7 capital plan, with over £3.4 billion invested across the portfolio of over 550 projects, transforming our customers airport experience across 6 core programmes.

The Next Generation Security Programme has been completed, delivering 74 new lanes with state-of-the-art CT scanners, achieving full passenger compliance and enabling 18 additional staff search areas, with all lanes now fully handed over to Operations.

Within the T2 Baggage Programme, the future system design has been agreed with five multidisciplinary partners to protect T2 baggage operations and improve reliability. The new design is supported by five transitional projects to maintain service performance and capacity.

The Carbon & Sustainability Programme delivered key decarbonisation infrastructure, including operational airside electric vehicle charging in T2 and the T5 Coach Park, alongside the installation of pre-conditioned air systems across stands in T3 and T5.

Commercial revenue initiatives progressed with an expanded food and beverage offer in T5, continued development of the Eastern Business Park, rollout of Digital Click & Collect retail, and refurbishment of VIP lounges within the Windsor Suite.

In Asset Management & Compliance, major infrastructure upgrades were completed to improve safety, resilience and the passenger experience. High-tech runway temperature and icing sensors were installed on the Southern Runway, while resurfacing works commenced on the Northern Airfield. The cargo tunnel refurbishment was completed, improving transfer efficiency, and new track transit vehicles in T5 increased capacity for connecting passengers. Additional resilience and capacity were delivered to T4's baggage system and in T3, a new airbridge has been installed.

The Efficient Airport Programme introduced a range of operational and passenger-focused enhancements to improve efficiency and journey quality. Enhanced flight data integration is enabling additional airspace capacity and contributing to reduced delays across Europe. In T5, a new network of AI-enabled cameras is improving aircraft turnaround performance and supporting more punctual departures. These operational improvements are complemented by passenger experience upgrades, including enhanced device charging, expanded seating and improved wayfinding, creating a more comfortable and seamless journey.

Heathrow Expansion

In February 2025, we announced a multi-billion-pound investment into Heathrow, laying the foundations for the third runway to expand the UK's Gateway to Growth.

In July, we submitted a proposal for Heathrow expansion to Government, which set out the plan to secure long-term capacity growth, the investment programme and what we need from Government to meet their ambition to receive planning permission by the end of this Parliament.

In the autumn, the Government announced the formal review of the ANPS, the policy which underpins airport expansion. Government also confirmed Heathrow's proposal had been selected as the basis to inform the ANPS' review, noting they expect a planning application to be brought forward by Heathrow.

In January this year, Heathrow's Board approved new investment to begin work on a planning application for a third runway. This decision aligns with the Government's ambitious timeline for Heathrow to secure planning permission by 2029 and a third runway could be operational in a decade. This decision reflects Heathrow shareholders' and Ministers' renewed commitment to realise the benefits of expanding the UK's hub airport as fast as possible.

Heathrow has always been clear the right policy and regulatory framework need to be in place in order to deliver the largest private investment project in Europe. Decisions on these key issues are expected throughout 2026. In spring, clarity is required from the CAA on how early costs can be recovered. Over the summer, the Department for Transport will publish the draft ANPS and the CAA will decide on the long-term regulatory model which will determine if private investment will be forthcoming. In the autumn, Parliament will be asked to decide on the final ANPS, a decision which will set the framework for the project to secure DCO by 2029. The first flights from a third runway could be in a decade.

Key regulatory developments

Expansion

In line with Government's November 2025 decision to support Heathrow's proposal for Expansion, the CAA has initiated two consultation processes. Heathrow has responded to the CAA's consultation on the regulatory treatment of expansion early costs (CAP3201). The response supports the CAA's approach in allowing recovery of efficiently incurred early costs in 2025 and 2026, which is an important step in providing regulatory certainty and maintaining investor confidence as expansion planning progresses. Heathrow also welcomes the decision not to apply outcome-based incentives at this early stage. Based on updated programme information, Heathrow has highlighted the case for revisiting the proposed £320 million (in 2024 price) cost cap to reflect latest forecasts and the benefits of bringing forward acquisition of key property on the critical path, reducing delivery risk and long-term costs. Heathrow has also emphasised the importance of RAB based cost recovery, appropriate protections if the project cannot proceed for reasons beyond Heathrow's control, and robust transparency and assurance arrangements. Following consideration of consultation responses, the CAA plans to publish its draft licence modification decision "as soon as practicable" and to consult during 2026 on the regulatory treatment of early costs from 2027 onwards.

In parallel, Heathrow has responded to the CAA's working paper on future regulatory models for expansion (CAP3195). The response is evidence led and focused on securing a regulatory framework that can deliver expansion on time, at the lowest whole life cost, and with strong consumer outcomes, consistent with Government targets for Development Consent by 2029 and a runway opening by 2035. The submission highlights Heathrow's strong track record under the existing RAB based model, which has enabled over £15 billion of private investment, delivered major terminals on time and on budget, and maintained service quality and financeability. Heathrow therefore proposes an evolved single RAB framework, enhanced through targeted reforms such as risk-based capital governance, smarter incentives, longer term regulatory commitments rather than structural overhaul. The response shows that models requiring legislative change, fragmenting ownership, or weakening cost recovery would risk delay, higher financing costs and lost consumer benefits and should be discounted. Heathrow expects the next CAA consultation in spring to narrow options materially, providing greater clarity to investors by summer 2026 when a decision is expected.

H8 Business Plan

Our customer-focused H8 Business Plan will modernise and upgrade the existing airport between 2027 - 2031 with a proposed £10 billion investment that will deliver better resilience, better passenger experience, better use of new and existing capacity and better sustainability. The plan commits to delivering 15 key outcomes for consumers, including 99% of baggage travelling with passengers, 95% of passengers waiting no more than five minutes at security, and a 20% increase in cargo capacity. Before and after submission, Heathrow has engaged extensively with the CAA and airline customers, providing further detailed evidence on costs, delivery and performance, including a third round of Constructive Engagement between July and September 2025. As the CAA moves towards its Initial Proposals (expected in March 2026), Heathrow continues to engage constructively and transparently, and a fourth round of Constructive Engagement is planned for March-May 2026. The Initial Proposals will set a holding price cap for 2027, noting the Final H8 Decision is not expected until April 2027 after the regulatory quinquennium has begun.

Key management changes

His Excellency Jassim Saif Ahmed Al-Sulaiti was appointed as director on the Heathrow Airport Holdings Limited ('HAHL') Board on 16 April 2025 representing QIA and replacing His Excellency Ahmed Ali Al-Hammadi who resigned on the same date. Luke Bugeja resigned as a director of the HAHL Board on 3 July 2025 and William Briggs was appointed as a director representing Ardian with effect from the same date. Philip Jansen was appointed Chairman of the HAHL Board on 1 January 2026 succeeding Lord Paul Deighton. On 24 February 2026, China Investment Corporation changed its nominated Non-Executive Shareholder Director on the Boards of Heathrow Airport Holdings Limited, FGP Topco Limited, ADI Finance 1 and ADI Finance 2 Limited from David Xie to Yiqiang Zhan.

Ultimate shareholder update

On 3 July 2025, Ardian completed its acquisition of an additional 10% stake in FGP Topco Limited, the holding company for Heathrow Airport Holdings Limited, from Ferrovial SE, Caisse de dépôt et placement du Québec and the Universities Superannuation Scheme, the applicable regulatory conditions having been satisfied. Ardian now holds a 32.61 per cent stake of the FGP Topco Limited in total.

Financial Review

Basis of presentation of financial results

Heathrow (SP) Limited ('Heathrow SP') is the holding company of a group of companies (the 'Group'), which includes Heathrow Airport Limited, which owns and operates Heathrow Airport and Heathrow Express Operating Company Limited which operates the Heathrow Express rail service. The Group's consolidated financial statements are prepared in accordance with UK-adopted International Accounting Standards.

The financial information presented within these condensed consolidated financial statements has been prepared on a going concern basis. More detail can be found in the going concern statement on page 18.

Alternative performance measures

Management uses Alternative Performance Measures ('APMs') to monitor performance as it believes this more appropriately reflects the underlying financial performance of the Group's operations. These remain consistent with those included and defined in the annual report and financial statements for the year ended 31 December 2025.

Summary performance

For the year ended 31 December 2025, the Group's revenue increased by 1.8% to £3,623 million (2024: £3,559 million). Adjusted EBITDA was stable at £2,034 million (2024: £2,035 million) due to higher aeronautical revenue from traffic uplift and travel mix offset by lower airport charges set by the CAA, greater relative amount of costs to support higher passenger volumes and a greater spend on asset maintenance. The Group recorded a profit after tax of £396 million (2024: £644 million).

(1) Revenue does not contain any adjustments for non-GAAP items.

(2) Adjusted operating costs exclude depreciation, amortisation, fair value gains and losses on investment properties and exceptional items (if any), which are explained further in note 2 in the financial statements.

(3) Adjusted EBITDA is profit before interest (net finance costs), taxation, depreciation, amortisation, fair value gains and losses on investment properties and exceptional items (if any).

(4) Adjusted operating profit excludes fair value gains and losses on investment properties and exceptional items (if any).

(5) Adjusted profit before and after tax excludes fair value gains and losses on investment properties and financial instruments, exceptional items (if any) and the associated tax impact of these.

(6) Certain re-measurements consist of fair value gains and losses on investment property revaluations, gains and losses arising on the re-measurement of financial instruments, together with the associated fair value gains and losses on any underlying hedged items that are part of a cash flow, fair value and economic hedging relationship and the associated tax impact on these.

(7) Exceptional items are irregular material write-off charges that result from a review conducted of existing Long-term Growth related assets in the course of construction for obsolescence.

Revenue

For the year ended 31 December 2025, revenue increased to £3,623 million (2024: £3,559 million), a 1.8% increase compared to the year ended 31 December 2024.

(1) Revenue does not contain any adjustments for non-GAAP items.

Growth in 2025 aeronautical revenue was supported by the traffic uplift and more long-haul travel offset by lower airport charges set by the CAA.

Higher traffic numbers boosted retail revenues with notable improvements in Food & Beverage sales due to extended opening hours. Car parking income increased with the higher passenger volume and Premium services also benefitted from the skew in long haul travel. These gains were offset by decline in Advertising income due to reduced screen-availability and a global downward trend in Bureau de Change demand that saw these revenues decline.

Growth in other revenue came from increased rental income from rent reviews and new lets alongside higher rail revenues.

More details can be found on page 20.

Adjusted operating costs

Adjusted operating costs increased 4.3% to £1,589 million (2024: £1,524 million).

(1) Unadjusted operating costs for the year were £2,374 million (2024: £2,061 million). This included depreciation and amortisation of £692 million (2024: £662 million), fair value loss on investment properties of £93 million (2024: £147 million gain) and a loss in exceptional items of £nil (2024: £22 million).

Employment costs decreased in 2025 due to improved workforce planning and company‑wide efficiency initiatives that offset higher wages and increased National Insurance costs.

Operational costs rose driven by higher security expenditure to support resilience and the transition to Next Generation Security as well as increased bag screening costs from higher passenger volumes. Passengers Requiring Support costs also increased to meet higher demand in 2025 as well as contractual changes. Operational technology costs rose reflecting continued investment in digital transformation and increased spend with key IT suppliers. This was partially offset by lower Measures, Targets and Incentives penalties because of better operational performance.

Maintenance costs increased as we invested to keep our ageing asset base reliable and operational. Cost increases were also linked to consultancy charges for digital transformation as well as marketing and research.

Lower utility costs reflecting favourable pricing and management initiatives helped mitigate overall 'other cost' growth during the year.

Net finance costs

Net finance costs before certain re-measurements increased to £1,067 million (2024: £923 million). The RPI annual growth rate has increased year on year from 3.6% to 3.8%, resulting in a higher principal accretion on inflation-linked liabilities.

Fair value gain on financial instruments

Fair value movements on financial instruments are measured with reference to market expectations of inflation and interest rates. The inflation forward and interest rate forward curves decreased by an average of 73bps and 30bps, respectively. Collectively, these resulted in a non-cash, fair value gain of £393 million (2024: £342 million).

Taxation

The effective tax rate on profit before tax, certain re-measurements and exceptional items was 34.9% (2024: 30.7%) based on a tax charge of £96 million (2024: £138 million). This was higher than the statutory rate of 25% primarily because of depreciation, which is partly non-deductible. In addition, a tax charge of £83 million (2024: £135 million) was recognised on certain re-measurements. The total tax charge for the year was therefore, £179 million (2024: £273 million).

In the year, the Group paid £59 million of Corporation Tax (2024: £51 million) and £10 million for group relief losses claimed (2024: received £17 million for group relief losses surrendered).

Cash position

As at 31 December 2025, the Group had £1,117 million (2024: £1,557 million) of cash and cash equivalents and term deposits, of which cash and cash equivalents were £301 million (2024: £1,132 million).

This equated to a £831 million decrease in cash and cash equivalents for the year, compared with a £941 million increase in the year ended 31 December 2024 in part due to an increase in term deposits and a lower overall liquidity requirement.

Cash generated from operations

For the year ended 31 December 2025, cash generated from operations decreased to £1,973 million (2024: £2,011 million). The following table reconciles cash generated from operations to adjusted EBITDA.

Restricted payments

The financing arrangements of the Group and Heathrow Finance plc ('Heathrow Finance') restrict certain payments unless specified conditions are satisfied. These restricted payments include, among other things, payments of dividends, distributions and other returns on share capital, any redemptions or repurchases of share capital, and payments of fees, interest or principal on any intercompany loans.

For the year ended 31 December 2025, total restricted payments made by Heathrow SP amounted to £761 million (2024: £137 million). These funded scheduled interest payments on debt held at Heathrow Finance and a total £550 million dividend to ultimate shareholders during the financial year.

Recent financing activity

In 2025, we continued to demonstrate strong access to both public and private debt markets through successfully raising £1.5 billion. In January, we issued a €600 million 11-year Class A Sustainability Linked Bond. In May, we priced £139 million of Class B debt through the US private placement market with maturities across 2035 and 2045. Also in July, we drew down on the £50 million Class B term debt that was priced in December 2024. In August, we successfully returned to the Canadian market after a four-year absence with the issuance of a C$600 million 12-year Class A bond. Also in the same month, we priced a £100 million 15-year Class A US private placement. In September, we issued a £300 million 17-year Class A bond, marking our first GBP Class A issuance since October 2020. Finally, in December, we priced £150 million of Class A term debt which is yet to be drawn.

Redemptions during 2025 comprised of the repayment of a Heathrow Finance bond of £250 million in March, a CAD Class A bond of C$500 million in May, Class A £100 million term facility in July and a EUR Class A bond of €750 million in October.

In 2025, we made early paydown of accretion on our inflation swaps, totalling £157 million (2024: £660 million) to support prudent management of our financial position and reinforce our covenant resilience.

Debt and liquidity

(1) Lease liabilities relating to leases that existed at the point of transition to IFRS 16 (1 January 2019) are excluded from consolidated nominal net debt. All new leases entered into post-transition are included.

The average cost of the Group's nominal gross debt as at 31 December 2025 was 3.68% (2024: 3.39%). This includes interest rate, cross-currency and index-linked hedge costs and excludes index-linked accretion. Including index-linked accretion, the Group's average cost of debt as at 31 December 2025 was 6.40% (2024: 5.20%). This reflects issuing more debt at higher market rates, along with higher inflation compared with last year.

The average life of the Group's gross debt as at 31 December 2025 was 9.8 years (2024: 9.9 years).

The Group's liquidity horizon is within our target range of 18 to 24 months. In making this assessment, the Directors have considered both the Heathrow SP Group of companies and the wider Heathrow Finance plc group of companies (the 'Heathrow Finance Group'). This includes operating cashflows under the base case business plan and capital investment, debt service costs, debt maturities and repayments. This liquidity position considers £1,340 million in cash resources across the Heathrow Finance Group, as well as undrawn revolving credit facilities of £1,386 million and an undrawn Class A loan of £150 million.

Debt at the Heathrow Finance Group

Financial ratios

As at 31 December 2025, Heathrow SP and Heathrow Finance are committed to support a prudent management of our financial position and reinforce our covenant resilience. Gearing ratios are defined within the Glossary.

Pension scheme

We operate a defined benefit pension scheme (the 'BAA Pension Scheme'), which closed to new members in June 2008. As at 31 December 2025, the defined benefit pension scheme, as measured under IAS 19, was funded at 100.6% (2024: 96.2%). This translated into a surplus of £16 million (2024: £99 million deficit). This surplus is driven by actuarial gains of £99 million (attributable to a 0.05% increase in the discount rate), past service credit of £15 million (2024: £3 million cost) and contributions paid into the defined benefit pension scheme in the year of £15 million (2024: £14 million) offset by service costs of £5 million, admin expenses of£4 million and a finance charge of £5 million.

In addition, the triennial funding valuation of the BAA Pension Scheme, completed by the Trustees in December 2025 and based on the position as at 30 September 2024, confirmed a £7 million surplus. As a result, no deficit repair contributions are required. The previous valuation as at 30 September 2021 also reported a surplus (£119 million), with no deficit contributions needed at that time. The Directors believe that the scheme has no significant plan-specific or concentration risks.

Climate change

Climate change will have a significant impact on the aviation industry and Heathrow in the years to come, and we have both a responsibility to continue to be ambitious in our endeavours to take carbon out of flying, as well as a responsibility to minimise risk to the business in the long-term. As part of our work over Climate-related Financial Disclosures ('CFD') as described in our annual report and financial statements, we have considered both transition and physical risks and have ensured that they are factored fully and consistently into our future financial long-term forecasts for those areas of the statement of financial position whose recoverability is assessed based on expected future cash flows, including property, plant and equipment, intangible assets, investment properties and deferred tax assets. In addition, we have ensured that the useful economic lives of our existing assets are appropriate, particularly with regard to the physical risks identified in the CFD as well as with regard to our net zero sustainability strategy as described in our annual report and financial statements.

Subsequent events

On 23 January 2026, the Group extended its existing revolving credit facility of £1,386 million by 2 years to 30 September 2029. On 5 February 2026, the Group issued a £400 million bond with a final maturity date of 5 February 2034.

Outlook

The financial outlook for 2026 remains consistent with the forecasts published in our Investor Report on 19 December 2025.

SUMMARY OF ADDITIONAL DISCLOSURES

Publication of Prospectus - The following prospectus (the 'Prospectus') has been approved by the Financial Conduct Authority and is available for viewing. Prospectus dated 19 December 2025 relating to the multicurrency programme for the issuance of bonds by Heathrow Funding Limited.

Full RNS available here: https://www.londonstockexchange.com/news-article/market-news/publication-of-a-prospectus/17382999

Publication of Documents Incorporated by Reference - The following documents, which are incorporated by reference in a prospectus which has been approved by the Financial Conduct Authority on 19 December 2025 and published by Heathrow Funding Limited (the Issuer) in connection with the multicurrency programme for the issuance of bonds by the Issuer (the Prospectus), are available for viewing:

Full RNS available here: https://www.londonstockexchange.com/news-article/market-news/doc-incorporated-by-reference/17383071

Publication of Final Terms - The final terms ("Final Terms") for the issue of B-14 GBP 400,000,000 5.625 per cent. Fixed Rate Bonds due 2034 (the "B-14 Bonds") issued by Heathrow Funding Limited (the "Issuer") under the Issuer's multicurrency programme for the issuance of bonds (the "Programme") are available for viewing.

Full RNS available here:  https://www.londonstockexchange.com/news-article/market-news/final-terms/17448696

Publication of Final Terms - The final terms ("Final Terms") for the issue of A-63 GBP 300,000,000 6.250 per cent. Fixed Rate Bonds due 2044 (the "A-63 Bonds") issued by Heathrow Funding Limited (the "Issuer") under the Issuer's multicurrency programme for the issuance of bonds (the "Programme") are available for viewing.

Full RNS available here:  https://www.londonstockexchange.com/news-article/market-news/publication-of-final-terms/17263424

Publication of Final Terms - The final terms ("Final Terms") for the issue of A-62 CAD 600,000,000 4.900 per cent. Fixed Rate Bonds due 2037 (the "A-62 Bonds") issued by Heathrow Funding Limited (the "Issuer") under the Issuer's multicurrency programme for the issuance of bonds (the "Programme") are available for viewing.

Full RNS available here:  https://www.londonstockexchange.com/news-article/market-news/publication-of-final-terms/17172221

Condensed consolidated income statement for the year ended 31 December 2025

(1) Amounts stated before certain re-measurements and exceptional items are non-GAAP measures.

(2) Certain re-measurements consist of: fair value gains and losses on investment property revaluations, gains and losses arising on the re-measurement of financial instruments, together with the associated fair value gains and losses on any underlying hedged items that are part of a cash flow, fair value and economic hedging relationship and the associated tax impact on these.

(3) Exceptional items in 2024 are irregular material write-off charges. Further detail can be found in note 3. There were no exceptional items in 2025.

Condensed consolidated statement of comprehensive income for the year ended 31 December 2025

 Condensed consolidated statement of financial position as at 31 December 2025

 Condensed consolidated statement of changes in equity for the year ended 31 December 2025

(1) In 2024, the Company completed a concurrent bonus issue and capital reduction as part of distributable reserves management. A bonus issue of 831 million ordinary shares at £1 each from retained earnings was subsequently converted into distributable reserves through a capital reduction, as well as £499 million of share premium. There were no cash inflows or outflows as a result of the transactions.

 Condensed consolidated statement of cash flows for the year ended 31 December 2025

(1) Term deposits have an original maturity of over three months.

(2) Interest paid on senior (Class A) debt of £525 million (2024: £518 million), which includes £20 million of lease interest paid (2024: £20 million), and interest paid on junior (Class B) debt of £55 million (2024: £71 million).

(3) The Group has elected to early pay £157 million (2024: £631 million) of accrued accretion and £nil of prepaid accretion (2024: £29 million), which was due to be settled within the next 12 months in line with the liquidity profile assessment of the Group.

(4) In 2024, the Group restructured two inflation-linked swaps by shortening the maturities from 2035. This resulted in a cash inflow to the Group of £14 million made up of £68 million net future interest less £54 million future accretion.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

General information

The financial information set out herein does not constitute the Group's statutory financial statements for the year ended 31 December 2025 or any other period. The annual financial information presented herein for the year ended 31 December 2025 is based on, and is consistent with, the audited consolidated financial statements of Heathrow (SP) Limited (the 'Group') for the year ended 31 December 2025. The auditors' report on the 2025 financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statements under section 498(2) or (3) of the Companies Act 2006.

Primary financial statements format

A columnar approach has been adopted in the income statement and the impact of separately disclosed items is shown in separate columns. These columns include 'certain re-measurements' and 'exceptional items' which management separates from the underlying operations of the Group. By isolating certain re-measurements and exceptional items, management believes the underlying results provide the reader with an understanding of the underlying performance of the Group, by concentrating on the matters over which it has most influence, whilst recognising that information on these additional items is available within the financial statements, should the reader wish to refer to them. 

The column 'certain re-measurements' in the consolidated income statement contains the following: (i) fair value gains and losses on investment property revaluations and disposals; (ii) derivative financial instruments and the fair value gains and losses on any underlying hedged items that are part of a fair value hedging relationship; (iii) the associated tax impacts of the items in (i) and (ii). The column 'exceptional items' contains the following: (i) exceptional items; and (ii) the associated tax impacts of the items in (i).

Accounting policies

Basis of preparation

The Group's financial statements comply in accordance with UK-adopted International Accounting Standards and are prepared under the historic cost convention, except for investment properties, financial assets, derivative financial instruments and financial liabilities that qualify as hedged items under fair value hedge accounting. These exceptions to the historic cost convention have been measured at fair value in accordance with IFRS and as permitted by the Companies Act accounting regulations.  

The financial statements for the year ended 31 December 2025 have been prepared on a basis consistent with that applied in the preparation of the financial statements for the year ended 31 December 2024, except for the following amendments which apply for the first time in 2025. However, not all are expected to impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

The following amendments are effective for the period beginning 1 January 2025:

· Amendments to IAS 21 titled Lack of Exchangeability.

· Disclosures about Uncertainties in the Financial Statements

These amendments haven't had any effect on the measurement and disclosures of any items included in the condensed financial statements of the Group.

These financial statements are presented in Sterling, which is the Group's functional currency, and are rounded to the nearest million pounds ('£m'), except where otherwise noted.

Going concern

The Directors have prepared the financial statements on a going concern basis as they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. In assessing the going concern position of the Group, the Directors have considered the principal risks and uncertainties likely to impact financial performance, cash flow, liquidity and covenant compliance for the period to May 2027.

Background

Heathrow is economically regulated by the CAA which controls Heathrow's maximum airport charges. We are currently operating under the H7 price control period, which runs between 1 January 2022 and 31 December 2026. The H8 price control period will run between 1 January 2027 and 31 December 2031. Heathrow's H8 Business Plan was submitted to the CAA in July 2025, with Initial Proposals due from the regulator in March 2026. As such, at this stage, the Directors do not have certainty over H8 charges which are within the going concern assessment period.

The Company is part of the wider Heathrow Group, with the ultimate parent undertaking being FGP Topco Limited. In considering the going concern assessment, the Directors have considered the wider Heathrow Group given the corporate structure.

The wider Heathrow Group can raise finance at both Heathrow (SP) Limited ('Heathrow SP') and Heathrow Finance plc ('Heathrow Finance') and is bound by two types of debt covenant, tested on 31 December each year: the Regulatory Asset Ratio ('RAR'), a measure of the ratio of consolidated nominal net debt to the Regulatory Asset Base ('RAB'); and Interest Cover Ratio ('ICR'), a measure of operating cashflows to debt interest charge. These covenants exist at different levels within the Group's Class A and Class B debt.

Base case scenario

Passenger forecasts are fundamental to the going concern analysis as a measure of forecast revenue and operating cash flows. There is inherent subjectivity in modelling future passenger numbers, but strong passenger demand provides confidence in our forecast passenger numbers. Despite economic uncertainty, interest rate pressures and inflation, total passenger numbers for the year ended 31 December 2025 exceeded forecasts at 84.5 million (0.7% increase from 2024). The base case assumes forecast passenger numbers of 85.0 million for the year ended 31 December 2026.

The base case uses tariffs for the year ended 31 December 2026 set out in the CAA's H7 Final Decision. From 1 January 2027, tariffs, capital expenditure and financing assumptions reflect the Initial Business Plan submitted by Heathrow to the CAA in July 2025.

Continued support for the Group's credit enabled Heathrow to successfully raise over £1.5 billion of debt in 2025, including a €600 million Class A sustainability-linked bond and £139 million in Class B and £100 million in Class A US private placements. We returned to the Canadian market after a four-year absence with the issuance of a C$600 million Class A bond and issued a £300 million Class A bond, marking our first GBP issuance since 2020. In addition, a £150 million Class A term debt was signed in December 2025 with delayed drawdown to mid-2026. As at 31 December 2025, the wider group has total liquidity available of £2.9 billion, comprising of £1.4 billion of cash held and £1.5 billion in undrawn and revolving credit facilities. Total debt maturity for the period to 31 May 2027 is £1.3 billion at Heathrow SP and £0.4 billion at Heathrow Finance. The base case also includes forecast debt issuances based on Heathrow's latest business plan.

The Group has sufficient liquidity to meet its base case cash flow needs until at least 31 May 2027, with no breaches of its covenants in that period.

Severe but plausible downside scenario

The Directors have also considered a severe but plausible downside scenario that considers inherent uncertainty in passenger numbers, but also H8 regulatory uncertainty from 1 January 2027 until finalised by the CAA.

Passenger numbers at the low end of Heathrow's Board approved passenger forecast is considered to be a severe but plausible outcome. This considers the Group's views of plausible impacts caused by reduced passenger confidence and other economic factors. The low range of passengers represents a 1.5% reduction against the forecast base case for 2026.

The tariff and capital expenditure assumptions remain the same as in the base case for 2026. Until the CAA's H8 Final Decision is published there is inherent uncertainty over the allowed tariffs and the size of the capital programmes from 2027. The CAA's Initial Proposals are not due until March 2026 and therefore the Directors have forecast a range of potential tariffs and capital expenditure outcomes, with the severe but plausible scenario reflecting lower capital expenditure and correspondingly a lower tariff to deliver those capital programmes in 2027.

While deemed unlikely, the Directors have also assumed that the Group would be unable to access debt markets for any new funding and that dividends would not be declared under such circumstances. Only committed facilities are included in the severe but plausible downside scenario.

Under the severe but plausible downside scenario, the Group has sufficient liquidity to meet all forecast cash flow needs until at least 31 May 2027, with no breach of its covenants in that period.

Reverse stress test

The Directors have performed reverse stress tests to assess the level of downside risk required to breach financial covenants within the going concern assessment period. The analysis considered extreme reductions in passenger numbers and, separately, the potential impact of a materially lower tariff outcome from 2027, pending the CAA's H8 Final Decision.

The Directors concluded that only highly remote materially lower passenger numbers or a substantially reduced tariff would result in a covenant breach. These passenger levels and tariff charges are well below the low end of the Group's forecast and are considered highly unlikely by the Directors. Should circumstances arise that require corrective action, many previously utilised tactical actions remain available, such as cost reduction, deferral of investment or temporary reprofiling of interest payments.

Conclusion

Having had regard to both liquidity and debt covenants and considering a severe but plausible downside scenario and reverse stress testing, the Directors have concluded that there is sufficient liquidity available to meet the Group and Company's funding requirements for at least 12 months from the date of approval of these consolidated financial statements and that it is accordingly appropriate to adopt a going concern basis for their preparation.

Significant accounting judgements and estimates

In applying the Group's accounting policies, the Directors have made judgements and estimates in a number of key areas. Actual results may differ from these estimates. The estimates and assumptions are reviewed on an on-going basis.

The areas of significant judgement and estimation uncertainty for the year ended 31 December 2025 will be set out in full in the Group's annual report and financial statements, which will be published shortly.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

1. Segment information

The Group is organised into business units according to the nature of the services provided. Most revenue is derived from the activities carried out within the Airport. The exception to this is Heathrow Express, which is a separately identifiable operating segment under IFRS 8, with separately identifiable assets and liabilities, and hence management reports on two operating segments, as follows:

· Heathrow Airport (Aeronautical and commercial operations within the Airport and its boundaries).

· Heathrow Express (Rail income from the Heathrow Express rail service between Heathrow and London).

The performance of the above segments is measured on a revenue and adjusted EBITDA basis. The reportable segments derive their revenues from a number of sources and this information is also provided to the Board on a monthly basis.

(1) The Directors have updated the aggregation of some items of revenue. The updated aggregation has been reflected in the comparative amounts. This affects the categories of 'retail concessions' (2024 as previously reported of £274 million), 'non-concession retail' (previously 'other retail' of £72 million in 2024), and 'travel services' (previously 'other services' of £152 million in 2024).

(2) Revenue of £1,033 million (2024: £1,095 million) was derived from a single external customer and has been included within the Heathrow Airport segment.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

1. Segment information continued

All unsatisfied performance obligations as at 31 December 2024 were satisfied during 2025 and are included within total revenue for the year. Management expects that all of the transaction price allocated to the unsatisfied contracts as of the year ended 31 December 2025 will be recognised as revenue during the next reporting period.

(1) Includes intangible asset amortisation charges of £58 million (2024: £38 million).

(2) Reflects fair value gain or loss on investment properties only.

(3) The split of depreciation and amortisation between the Heathrow Airport and Heathrow Express segments for the year ended 31 December 2024 has been updated to reflect the impact of IFRS 16 adjustments to Heathrow Express leases.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

2. Operating costs

(1) Operational costs consist of expenditure in relation to the standard operations of the airport.

(2) The largest balance in this category is marketing costs of £62 million (2024: £53 million). Other expenses in this category are individually immaterial.

(3) Eligible research and development expenditure is identified retrospectively annually, following detailed review work. It is not therefore known with precision at the accounting date.

3. EXCEPTIONAL ITEMS

Asset write-off

In the year ended 31 December 2024, the Group conducted a review of existing Long-term Growth-related assets in the course of construction for obsolescence resulting in a £22 million non-cash write-off charge. There were no exceptional items in 2025.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

4. Financing

(1) Includes accretion of £102 million (2024: £76 million) on index-linked bonds.

(2) Includes accretion of £355 million (2024: £282 million) on index-linked swaps.

(3) Capitalised interest included in the cost of qualifying assets arose on the general borrowing pool and is calculated by applying an average capitalisation rate of 5.57% (2024: 6.97%) to expenditure incurred on such assets.

(4) Includes foreign exchange retranslation loss on the currency bonds of £5 million (2024: £5 million gain) which has moved systematically in the opposite direction to that of the cross-currency swaps which economically hedge the related currency bonds.

(5) The value of all currency bonds changes systematically in the opposite direction to that of the related cross-currency swaps, in response to movements in underlying exchange rates with a net nil impact in fair value for foreign exchange movements.

Notes to the condensed consolidated financial statements for the year ended 31 December 2025

7. Property, plant and equipment