More than 600,000 passengers cancelled December flights through Heathrow amid Omicron

Britain's busiest airport Heathrow was hit hard by the fallout from the Omicron coronavirus variant in December when 600,000 passengers cancelled their travel plans. The airport handled 19.4 million passengers in 2021, less than a quarter of pre-pandemic levels of 80.9 million customers and lower than the 22.1 million seen in 2020, with travellers shelving travel plans from late November amid a surge of coronavirus cases.

The airport said the Covid-19 pandemic still poses “significant challenges for the travel industry” with “significant doubt over the speed at which demand will recover”.

Heathrow chief executive John Holland-Kaye said there are currently travel restrictions, such as testing, on all of the airport's routes. "The aviation industry will only fully recover when these are all lifted and there is no risk that they will be reimposed at short notice, a situation which is likely to be years away,” he said.

Britain's airports have been hit hard during the pandemic by waves of infections and travel restrictions that were unveiled at very short notice, requiring passengers to take expensive tests or isolate to avoid spreading the virus.

Things were looking up in the Autumn when more than 3 million passengers travelled through Heathrow in October. This was the sixth consecutive month of growth, as the relaxation of travel curbs before the half-term holiday unleashed pent up demand, with close to 100,000 travellers a day.

However, Omicron halted the rebound and passenger numbers are not expected to reach pre-pandemic levels until 2025, according to the International Air Transport Association.

Even this is only possible if travel restrictions are removed at both ends of a route and passengers have confidence they will not return rapidly, Iata said. As a result, Heathrow is urging the UK government to remove all testing for fully vaccinated passengers and to adopt a playbook for any future "variants of concern" that is more predictable, limits additional measures only to passengers from high-risk destinations and allows quarantine at home instead of in a hotel.

Travel to and from the Asia/Pacific region in 2021 was down 40.3 per cent year-on-year, according to Heathrow, while other markets with double-digit reductions were non-EU Europe – down 13.8 per cent and North America – down 13.6 per cent. Domestic travel bucked the trend, with a 21.1 per cent boost in passengers compared with 2020.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the web of rules and regulations clearly led to a drop in confidence in the travelling public.

"Mass vaccination programmes failed to have the desired effect in 2021, in bringing the rebound in travel as there had been such high hopes for this time last year," she said.

"The threat of expensive hotel quarantines following a rapid rule change and the risk of being left stranded overseas if testing positive were hardly a relaxing prospect for holidaymakers wanting to get away from it all. It means there was a lacklustre uplift in customers of 12 per cent, compared to 2020."

Mr Holland-Kaye issued a warning that the current rules create "enormous uncertainty" for the Civil Aviation Authority (CAA) as it prepares to set a five-year limit on Heathrow's passenger charges.

"The regulator must focus on an outcome that improves service, incentivises growth and maintains affordable private financing," he said.

The CAA increased the limit on Heathrow's price per passenger from £19.60 ($26.61) to £30.19 from January 1, with airlines expressing outrage at the decision, claiming the rise was too high.

The CAA is expected to announce a long-term cap running from the summer to 2027 in the coming weeks. Looking ahead, Ms Streeter said despite hopes for pent up demand to translate into a bounce-back in bookings this year, the industry looks set to face a long-haul recovery ahead.

"Many consumers are faced with an income squeeze, which is likely put to expensive holidays out of reach. Others might have splashed their piles of savings on other luxury treats instead," she said.

"Among some older travellers who may still have the cash to spare, there is still a lingering fear of the new variants and they are likely to keep putting off booking that once coveted overseas trip."