Shares in Aer Lingus owner rise as Heathrow sets cap for summer seats

Heathrow Airport will limit daily passenger traffic to 100,000 departing people through to September 11.

London Heathrow is imposing a two-month cap on daily passenger traffic, a dramatic response by Britain's busiest airport to the flight chaos gripping Europe as airlines and ground crew struggle with a surge in travel demand.

The airport will limit daily passenger traffic to 100,000 departing people through to September 11, asking airlines to refrain from selling summer tickets. Current forecasts are modeling for as many as 104,000 passengers a day over the summer, still below the roughly 125,000 passengers that left daily this time before the pandemic.

Shares in IAG, which owns British Airways, Aer Lingus, and Iberia which heavily rely on Heathrow closed over 3% higher in the session. EasyJet shares also rose, by 1.5%. Capacity curbs across Europe have also caused ticket prices to surge.             

The move comes in reaction to staffing that Heathrow said is not yet “up to full speed” as it rushed to replenish its workforce with new recruits. Some key functions, like ground handlers for baggage, remain significantly under-resourced, according to the airport. 

“Our objective is to protect flights for the vast majority of passengers at Heathrow this summer,” said John Holland-Kaye, Heathrow’s CEO. “We recognise that this will mean some summer journeys will either be moved to another day, another airport or be cancelled and we apologise to those whose travel plans are affected,” he said. 

Ticket pricing and cancellation data show that Europe is where the turmoil has converged to inflict maximum pain on consumers, while Asia’s travel industry is still navigating Covid-19 and the US suffers from a shortage of pilots. 

Some airlines have already responded, with British Airways scrapping a swath of flights for the summer season. Heathrow said that of the 4,000 excess daily seats, only about 1,500 have currently been sold. 

Bloomberg. Additional reporting Irish Examiner