Heathrow Chief Says Airport Investors Demand Fair Returns

Heathrow Airport Ltd. said Europe’s busiest aviation hub risks losing equity investors should U.K. regulators fail to approve proposals to spend 3 billion pounds ($4.7 billion) on the facility in the five years to 2019.

“Shareholders will only invest if they foresee a fair return and clearly there hasn’t been a fair return in the current five-year period,” Chief Executive Officer Colin Matthews said in a telephone interview today. “It’s very important there is in the next.”

Investment in the period starting April 2014 will cover the completion of Heathrow’s new Terminal 2 facility, additional taxiways and a retooled baggage system, the airport operator said on Feb. 12. The U.K.’s Civil Aviation Authority, which sets the maximum amount Heathrow is allowed to charge airlines, must approve the plan before it goes into effect.

Adjusted pretax profit totaled 46.4 million pounds last year, compared with a loss of 166.7 million pounds in 2011, while sales rose 8.1 percent to 2.46 billion pounds, the London-based company said in a statement today. Capital spending totaled 1.16 billion pounds, including 1.14 billion pounds at Heathrow and 16 million pounds on Stansted airport in northeast London, a business the company has sold.

Heathrow shareholders received a 240 million-pound dividend in 2012, the first since Spanish builder Ferrovial SA led a group of investors that bought the airport operator in 2006. The total payout figure amounted to 436 million pounds, including loan interest and 99 million pounds in cash that was returned to the group, Heathrow said.