2024 was a good year for Heathrow. From maintaining our position as the best connected airport in the world, to welcoming more passengers than ever before, there is magic happening at Heathrow every day and colleagues can be proud of what they've achieved together. Heathrow's two runways were already the busiest in the world, but this year we pushed even further. With passenger demand to fly from Heathrow growing, we welcomed 3 million more passengers in 2024 versus the previous peak in 2019, taking the total for the year to a record 83.9 million. That included 75 days across the year where we were welcoming more than 250,000 passengers a day in our terminals. While we are expecting passenger demand to grow in 2025, capacity constraints at the airport will naturally limit our ability to service it and continue to present a challenge when it comes to maintaining peak operational resilience.

Delivering more value for our customers will continue to be our priority. Our service levels improved in 2024 with better punctuality, lower baggage misconnect rates and stable security wait times - partly a result of the £1.1 billion we invested this year to improve our facilities - but there is more work to do to get to where we want to be. That also includes becoming more efficient. Despite record passenger numbers, our adjusted EBITDA was down by 8.7% due to lower aero charges set in the CAA's H7 settlement. Our overall liquidity remains strong at £3.4 billion. We have maintained robust financial resilience with gearing being at historical low levels, and lower financing costs have helped to boost overall profitability. In the year ahead, we will continue to challenge ourselves to streamline our business.

Improving the sustainability of our operations is also a key focus area. In 2024, we set new and stretching targets in our refreshed Connecting People & Planet sustainability strategy reflecting the progress we have made towards our objectives. Our world-leading sustainable aviation fuel incentive programme continues to drive uptake at Heathrow which is outpacing the Government mandate. We also published our first-ever Nature Positive Plan which outlines how Heathrow will transition to a nature positive future, and achieved a record 189 nights without late flights. While mitigating our environmental impacts can seem overwhelming, there is a lot dynamism and energy surrounding our efforts to decarbonise and make Heathrow a great place to live and work.

Looking to the future, unlocking new capacity at Heathrow is central to our strategy. It will improve operational performance and resilience for our customers, enable more global connectivity and competition for consumers and grow the UK economy through increased trade, tourism and investment. We welcome the Government's recognition of the role we play in driving economic growth for the UK and desire to build a third runway at Heathrow within the next decade. We will be submitting our plans to the Government on how this might work by the summer, as well as working with Ministers to agree the policy changes on airspace modernisation, planning reform and regulation that are required to successfully deliver it. In tandem, we are also preparing our business plan for the next regulatory settlement (H8) which will begin in January 2027. We have had several constructive engagement sessions with our airline partners to understand their priorities which we will be factoring into our initial plan to submit to the CAA in June.

The progress we made in 2024 is a strong foundation, but there is more work to do. Service levels are good, but we can make further improvements to boost operational performance and resilience. Looking at how we can become more efficient and reduce costs is also important. Growing capacity responsibly while mitigating our environmental impacts must also remain a priority. To tackle these challenges, I was pleased to launch our refreshed corporate strategy this year. Composed of six beacons (Winning Team, Focus to Go Gaster, Value for Customers, Digital Future, People & Planet and Creating Capacity) and underpinned by three foundations (Safety, Security & Compliance; Service & Operations; and Governance & Financial Resilience), the refreshed strategy sets the flight path for what we need to do to prepare Heathrow for the future while empowering colleagues with the tools they need to make every journey better. I am pleased to report that we are already making good progress in delivering the new strategy, and our colleagues can take pride in the remarkable year we delivered together. Onward to 2025.

Thomas Woldbye - Heathrow CEO

STRATEGIC UPDATE

Beacons in action

In early 2024, we launched our new strategy to ensure collective focus and progress towards delivering our vision: "To be an extraordinary airport, fit for the future". To translate this vision into reality, we have identified six beacons. These beacons have been chosen to address the most urgent needs in the short and medium term, providing a clear roadmap for achieving our objectives. The following section summarises each of the six beacons for the year ended 31 December 2024. For the complete picture and associated case studies, please refer to the 2024 Annual Report.

Winning Team

Our Winning Team beacon is at the heart of our strategy. In 2024, we made significant progress toward an inclusive and engaging culture that attracts and retains diverse talent while unlocking colleagues' potential. A new career champions programme was designed and launched, with over 300 colleagues participating in the career advice and guidance programme. The 2022 graduates secured new management roles, and we launched our 2025 graduate campaign. We introduced an improved virtual GP and employee assistance benefit for all colleagues and their families, and our family friendly policies were enhanced, providing a better offering for our colleagues. Our internal manager and leadership programmes continued to deliver high engagement and attendance with 1,604 participants, and Heathrow won the prestigious British Training Awards for our 'Lead the Way' management programme. We launched a new recognition platform enabling colleagues and line managers to say 'thank you' at the click of a button. Recognising diversity and inclusivity saw National Inclusion Week celebrating our five equality, diversity and inclusion (ED&I) networks, highlighting belonging and engagement within our colleagues. Heathrow also won 'Diversity Team of the Year' for the delivery of EDI strategy at the British Diversity Awards.

To foster a great place to work, we have developed a robust engagement engine that empowers us to make informed organisational decisions based on our colleagues' collective voice. Our bi-annual Pulse engagement surveys, most recently conducted in November 2024, saw a record-breaking 91% participation rate. We ended the year with 67% of colleagues agreeing that Heathrow is a Great Place to Work.

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 2024, we continued to streamline processes and optimise resource allocation to enhance speed and productivity while maintaining service standards. Key achievements included delivering management initiatives to drive EBITDA improvement and upsizing the H7 capital plan to £4.5 billion. Agile decision-making also enabled swift responses to the rapid vacation of Eastern Business Park to enable demolition ahead of site transformation in line with the plan. Additionally, 51 new security lanes were implemented at a pace across our terminals as part of our Next Generation Security Capex programme. In June 2024, we implemented security fast track lanes across all terminals to enhance the customer experience. This initiative is designed to streamline the security process and provide a more efficient journey for our passengers. Further highlights include streamlining external financial reporting, removing Q1 and Q3 results, and replacing them with a short Trading Statement.

Value for Customers

The Value for Customers beacon highlights Heathrow's commitment to deliver good service for passengers and create value for all customers. In 2024, we significantly expanded our retail and food offerings, with 15 new retail openings. We also trialled new fast charging options in terminals to meet increasing passenger demand, and improved service offering through our Heathrow Helper team with the majority of passengers rating their service interactions with this team as very good or excellent. Operational improvements enhanced customer experience, including further automation of Self-Service Bag Drop, updated T4 connections routing, reducing journey times, continued roll out of next-generation security scanners and completing the southern runway resurfacing. For passengers requiring support (PRS), all areas exceeded good scores, setting a new standard for accessibility. Further investments included transforming retail spaces into luxury units, completing the VIP Windsor Suite lounge refurbishment, and installing 40 Ramp Information Display Screens to streamline operations.

Digital Future

The Digital Future beacon reflects Heathrow's commitment to leveraging digital capabilities; embracing innovation to improve productivity and efficiency as well as elevating the passenger experience through digital capability. In 2024, key achievements included the launch of AI service replies for customer Live Chat, reducing average handling times, and a successful trial of digital-only Heathrow Express ('HEx') fares. We also introduced innovative initiatives, such as the Pay in Advance option for Reserve & Collect retail and user experience insights for HEx bookings and airport lounge upselling. Passenger experience was further enhanced with the launch of a virtual guide for T2, and the integration of WhatsApp into the Heathrow app, expanding communication channels. Sustainability and cost efficiency were also priorities, demonstrated through the successful trial of ePaper for digital signage and preparations for deploying a 5G public network. We have begun a full transformation of our Information and Technology function which will enable us to move fast through utilising Agile project management disciplines, as well as to ensure the safe and secure IT operation every day. In addition to this, we have recruited new leadership roles in both Data & Analytics and Digital Transformation so that our entire business and customer offering is more digitally capable. These achievements underscore Heathrow's commitment to digital solutions to remain competitive in the global aviation sector.

People and Planet

In 2024, we refreshed our sustainability strategy in light of our recovery and to align it with our revised business strategy. The updated strategy, Connecting People and Planet (previously called Heathrow 2.0), strengthens our ambitions in many areas while revising our approach in others to help drive progress more effectively. Changes to goals or targets are signposted in our sustainability strategy and our Sustainability Report.

We are working with others in the aviation industry and the UK Government to drive progress towards net zero flights by increasing the adoption of SAF, contributing to research into zero-carbon emissions flights ('ZEF'), and improving aircraft and airspace efficiency. Our "in the air" emissions totalled 18.5 million tonnes, 7.5% less than 2019, and "on the ground" emissions totalled 890,00 tonnes, representing 14.6% less than 2019. SAF increased to 2.5% of fuel uplifted at Heathrow in 2024, and we supported wider efforts to drive uptake of SAF as detailed in our Annual Report.

In 2024, we also published our first Nature Positive Plan and retained the Wildlife Trusts' benchmark award for the 16th consecutive year for 10 of our biodiversity sites. We became the first airport to commit to reporting in line with the Taskforce for Nature-related Financial Disclosures recommendations, with a disclosure planned for our 2025 annual reporting.

Creating Capacity

The Creating Capacity beacon focuses on making the best use of our existing capacity and current infrastructure, creating new capacity, and preparing for future growth. Despite being capacity-constrained, Heathrow remains committed to long-term growth, ensuring it connects London and the UK to global opportunities. To illustrate it, key infrastructure developments included securing permitted development consent from Hillingdon Council for the Terminal 2 Baggage Programme and the airline-endorsed 'Parkwise' project, which will create 900 additional parking spaces. Progress has also been made in longer-term planning with the launch of the Modernising Heathrow programme, which will focus on creating additional capacity within Terminal 5 A, B and C terminals and significant enhancements to Terminal 2, allowing the phased replacement of facilities currently housed in Terminal 3. These actions demonstrate Heathrow's dedication to meeting current and future demands.

Following a keynote speech in late January 2025, in which the Chancellor for the Exchequer specifically called for a third runway at Heathrow, we will be submitting our proposals for the project by the summer of 2025.

Business Update

In assessing our performance for the year ended 31 December 2024, 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 rounded passenger figures

(1)         For the year ended 31 December.

(2)        Calculated using rounded passenger figures

(3)        Cargo tonnage includes mail volumes

In 2024, Heathrow welcomed 83.9 million passengers, an increase of 5.9% compared to the prior year (2023: 79.2 million), after the airport handled back to back months of record breaking traffic. The growth was driven by higher passenger ATMs and seat factor levels, currently standing at 80.7%. During last year, we also offered a record number of seats, almost 104 million.  We remain Europe's busiest hub and the world's "most connected airport", with New York, Dubai, Doha, Dublin and Los Angeles amongst the busiest routes in 2024. Almost all markets exceeded 2023's numbers, with double-digit growth for the UK. In Africa we saw a normalisation of traffic due to the reallocation of slots. Our seats per ATM slightly decreased as short-haul travel recovered. Cargo tonnage grew at more than 10%, driven by the rise in wide-body passenger aircraft movements and the allocation of ad-hoc slots.

Service and operational performance

(1)         For the year ended 31 December.

In 2024, we achieved an overall ASQ rating of 3.98 out of 5.00, which was relatively stable compared to 2023 (3.99) despite increasing passenger numbers and the reintroduction of liquid rules in June 2024. Overall, 74% of passengers surveyed between January and December 2024 rated their Overall Satisfaction with Heathrow as either 'Excellent' or 'Very good', remaining consistent with 2023. The proportion of 'Poor' ratings remained low at only 1%.

Improvements compared to 2023 were particularly evident in 'Ease of Making Connections with other Flights'. 'Check-in Waiting Time' and 'Availability of Seats at the Gate Areas' outperformed their 2023 levels. Other performance uplifts included 'Wi-Fi Service Quality' and other 'Check-in' aspects.

Operationally, we delivered good service during our busiest year. Security performance was stable, with most all direct passengers passing through security within 5 minutes, despite the operational challenges that the implementation of our next-generation security programme presents. Improved operational performance across the airfield has seen improved aircraft turnarounds, with departure punctuality outperforming arrivals. However, overall punctuality continues to be impacted by airspace congestion and adverse weather events. Baggage performance improved despite the increased traffic.

Capital expenditure

In 2024, £1,122 million (2023: £636 million) of capital expenditure was incurred, including £58 million in capital creditors movements (2023: £32 million).

We made great progress on our H7 Capital Plan, investing almost double in 2024 than in 2023, bringing the total invested in H7 to over £2.1 billion across the portfolio of 450 projects in six programmes. Our next-generation Security Programme is progressing well, with training for 4,000 Security and Engineering staff in progress. In the T2 Baggage Programme, the new system design is being developed with five multidisciplinary partners. The Commercial Revenue Programme delivered new media screens in terminals, and we also saw further developments in our retail estate, including a new Harrods store in T3. The Carbon and Sustainability Programme continues to roll out electric vehicle (EV) chargers, with stations for airlines and staff now operational airside in T2 and T3, along with plans for new carbon-efficient pre-conditioned air units for aircraft stands. We have implemented enhanced time-based separation for arrivals, a global first. In the Asset Management and Compliance Programme, we are progressing well, having completed the resurfacing of the southern runway and installed safety systems in the cargo tunnel. The new virtual control facility building is complete and ready for systems fit out. Lastly, the Efficient Airport Programme is delivering projects to enhance punctuality, service, and operational efficiency across the airport, including 80 new screens in T5 to display live updates on airfield activities, improving ground operation management.

Key regulatory developments

Significant progress has been made during the year with respect to H8, which is due to commence at the start of 2027. The current timetable is for Heathrow to submit its business plan in June 2025, for the CAA to set out its Initial Proposals in December 2025, and for a Final Decision in September 2026. Alongside this process, the CAA has set out four rounds of constructive engagement ('CE'), two ahead of Heathrow's business plan submission, one afterwards, and the final one after the CAA's Initial Proposals. The first round of CE started in November, with five sessions focusing on broad priorities around capacity and resilience, passenger forecast, customer experience, and capital choices. This early round of CE has allowed Heathrow to gain a deeper understanding of our airline partners' requirements ahead of developing our plan, assisting in our aim to ensure that the Business Plan we submit is truly customer led.

In November, the CAA published a consultation on the methodology for H8 together with a consultant report on potential cost of capital for H8. After considering stakeholders' views, the CAA should issue a final method statement, including guidance for Heathrow's business plan submission, in February 2025. Heathrow has responded to the methodology focussing on five key areas where we seek changes.

-       Enhancing the regulatory framework to boost investment opportunities - reform of the single till boundary to address the harm to consumers arising from the lack of property investment in the central terminal area and the perimeter of Heathrow.

-       Seeking a collective approach to Measures, Targets and Incentives (MTIs) - drive improved performance, resilience and consumer outcomes through a collective MTI regime.

-       Evolving and targeting capex governance changes - a framework to deliver small and digital/ technology focused capex projects faster and more efficiently.

-       Setting a clear direction on financeability fundamentals - agreeing an approach that recognises the importance of the right credit rating, cost of capital and approach to inflation.

-       Improving the business plan incentive - clear, objective and measurable assessment criteria to allow Heathrow the framework to deliver on the CAA's ambition for the business plan incentive.

In addition, Heathrow responded to the CAA consultation on cost of capital, focussing on the appropriate asset beta for Heathrow and ensuring that the cost of embedded debt is consistent with Heathrow's actual cost.

Key management changes

Jo Butler was appointed Chief People Officer (CPO) in January 2025. Jo has wide ranging and robust experience as a people leader, having worked at Sainsbury's, Santander and most recently ASOS. Jo also spent two years working on the Executive Committee of Mitie Group plc, as Group HR Director. Paula Stannett, Chief People Officer, left Heathrow at the end of August.

Ultimate shareholder update

On 12 December 2024, entities owned by Ardian and The Public Investment Fund ('PIF') acquired c. 22.61% and c. 15.01% respectively of the share capital of FGP Topco. Ferrovial, CDPQ and USS have reduced their shareholdings in FGP Topco to 5.25%, c. 2.65% and c. 2.10% respectively.

Following the transaction, Juan Angoitia, representing Ardian; Alexis Ballif, representing Ardian; Turqi A. Alnowaiser, representing PIF; Yazeed Alrubaian representing PIF were appointed as directors of FGP Topco Limited, ADI Finance 1 Limited, ADI Finance 2 Limited and Heathrow Airport Holdings Limited on 12 December 2024. Luke Bugeja will now represent Ferrovial, CDPQ and USS, replacing Ernesto López Mozo, Shawn Kinder, Olivier Fortin and Mike Powell.

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 ('HAL'), which owns and operates Heathrow Airport, and Heathrow Express Operating Company Limited ('Hex Opco') which operates the Heathrow Express rail service. Heathrow SP'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 17.

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 2024.

Summary performance

For the year ended 31 December 2024, the Group's revenue decreased by 3.5% to £3,559 million (2023: £3,687 million). Adjusted EBITDA decreased 8.7% to £2,035 million (2023: £2,228 million) due to lower aeronautical charges set by the CAA and increased adjusted operation costs from rising demand and the inflationary pressures. The Group recorded a
£644 million of profit after tax (2023: £522 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 which are explained further in note 2.

(3)      Adjusted EBITDA is profit before interest, taxation, depreciation, amortisation and fair value gains and losses on investment properties and financial instruments and exceptional items.

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

(5)      Adjusted profit before and after tax excludes fair value gains and losses on investment properties and financial instruments, exceptional items 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 2024, revenue decreased to £3,559 million (2023: £3,687 million), a 3.5% decrease compared to the year ended 31 December 2023.

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

Aeronautical revenue has decreased, driven by lower H7 charges set by the CAA, partially offset by higher passenger numbers. Retail income, which includes retail concessions and car parking, has increased, driven by higher departing passengers and an increased use of premium services. Other revenue has increased due to higher other regulated charges ('ORCs'), mainly from under recovery from prior years, offset by the greater travel choice and price competition impacting modes of travel, including Heathrow Express. More details can be found on page 19.

Adjusted operating costs

Adjusted operating costs increased 4.5% to £1,524 million (2023: £1,459 million).

(1)         Unadjusted operating costs for the year were £2,061 million (2023: £1,980 million). This included depreciation and amortisation of £662 million (2023: £730 million), fair value gain on investment properties of £147 million (2023: £209 million) and a loss in exceptional items of £22 million (2023: £nil).

Employment costs, which include overtime, recruitment and training, have increased due to additional colleagues needed to accommodate the higher demand and inflation.

The rise in operational and maintenance is mainly due to higher levels of passengers requiring support ('PRS'), cleaning and maintenance.

Finally, tight cost controls and stable energy prices have resulted in slightly lower utilities and other costs.

Net finance costs

Net finance costs before certain re-measurements decreased to £923 million (2023: £1,460 million). The RPI annual growth rate has decreased year on year from 5.3% to 3.6%, resulting in a lower 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 increased by an average of 11bps and 61bps, respectively. Collectively these resulted in a non-cash, fair value gain of £342 million (2023: £454 million).

Taxation

The effective tax rate on profit before tax, certain re-measurements and exceptional items was 30.7% (2023: 84.2%), based on a tax charge of £138 million (2023: £32 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 £135 million (2023: £147 million) was recognised on certain re-measurements. The total tax charge for the year was, therefore, £273 million (2023: £179 million).

In the year, the Group paid £51 million of Corporation Tax (2023: £1 million) and received £17 million for group relief losses surrendered (2023: £nil).

Cash position

At 31 December 2024, the Heathrow SP Group had
£1,557 million (2023: £1,941 million) of cash and cash equivalents and term deposits, of which cash and cash equivalents were £1,132 million (2023: £191 million).

This equated to a £941 million increase in cash and cash equivalents for the year, compared with a £94 million decrease in the year ended 31 December 2023.

Cash generated from operations

For the year ended 31 December 2024, cash generated from operations decreased to £2,011 million (2023: £2,092 million). The following table reconciles adjusted EBITDA to cash generated from operations.

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 2024, total restricted payments made by Heathrow SP amounted to £137 million (2023: £200 million). This funded scheduled interest payments on debt held at Heathrow Finance. No payments to ultimate shareholders were made during the financial year. On 20 February 2025 the directors of Heathrow Airport Holdings Limited proposed a dividend of £250 million. The proposed dividend is intended to finance a future dividend being paid by the ultimate parent company of the Group, FGP Topco Limited. To facilitate the future dividend to shareholders of FGP Topco Limited the Company will be required to declare a dividend

Recent financing activity

In 2024 we successfully accessed public and private debt markets, navigating the macro volatility of the UK and US elections, and as inflation and interest rates moderated from elevated levels. In February, we issued a £350 million, 8-year, Class B Sustainability-Linked Bond (SLB), marking our debut in the GBP SLB market and the first SLB in the Sterling market to encompass all scopes of emissions. Additionally, in March, we issued a £400 million, 7-year bond at Heathrow Finance, the largest transaction ever completed by Heathrow Finance. In May, we also priced £100 million in new Class A debt and £100 million in new Class B debt through the private placement market, including our first green issuance with maturities in 2039 and 2054, with proceeds received in August. Furthermore, in December, we successfully issued a CHF220 million, 8-year, Class A SLB, our debut in the CHF SLB market, which also included all scopes of emissions and was the first by a non-domestic issuer and an undrawn £50 million Class B loan.

Redemptions during 2024 comprised the repayment of a Class B bond of £600 million in February, a Heathrow Finance bond of £300 million in March, a Class A bond of CHF400 million in May and a Heathrow Finance loan of £75 million in August.

In 2024, we made early paydowns of accretion on our inflation swaps, totalling £660 million.

Debt and liquidity at Heathrow (SP) Limited

(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 Heathrow SP's nominal gross debt at 31 December 2024 was 3.39% (2023: 3.68%). This includes interest rate, cross-currency and index-linked hedge costs and excludes index-linked accretion. Including index-linked accretion, Heathrow SP's average cost of debt at 31 December 2024 was 5.20% (2023: 9.11%), this reduction is mainly driven by lower inflation over the period.

The average life of Heathrow SP's gross debt as at 31 December 2024 was 9.9 years (2023: 10.2 years).

The Group has sufficient liquidity to meet its forecast needs for the next 24 months. In making this assessment, the Directors have considered both the Heathrow SP Group of companies, as well as 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 £2,014 million in cash resources across the Heathrow Finance Group, as well as undrawn revolving credit facilities of £1,386 million and an undrawn Class B loan of £50 million.

Debt at Heathrow Finance plc

Financial ratios

At 31 December 2024, Heathrow SP and Heathrow Finance continue to operate within required financial ratios. 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. At 31 December 2024, the defined benefit pension scheme, as measured under IAS 19, was funded at 96.2% (2023: 95.6%). This translated into a deficit of £99 million (2023: £128 million). The £29 million decrease in the deficit is largely due to actuarial gains of £35 million attributable to a 0.9% increase in the discount rate; service costs of £13 million; a finance charge of £7 million; and contributions paid in the year of £14 million (2023: £14 million) into the defined benefit pension scheme. No deficit repair contributions have been paid in the year (2023: £nil). 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.

Outlook

The performance outlook for 2025 remains consistent with the forecasts published in our Investor Report on 13 December 2024.

Starting in 2025, our financial results will be published semi-annually. A new Trading Statement will replace the Q1 and Q3 financial results.