A top line income of £665m/$858m (+2% YOY) at London Heathrow Airport in Q1 was spearheaded “by continued strong retail growth” totalling £148m/$190m (+8.8% YOY), Heathrow Airport announced today.

Duty and tax free sales hit 32m/$41.2m (+10.3% YOY), with revenue from airside specialist outlets registering £30m/$38m (+20% YOY).

In an additional boost, revenue on a per passenger level increased by 6.4% to total £8.62/$11.1.

Adjusted EBITDA was £382m/$492m (+4.1% YOY), operating costs were down -0.7% to £273m/$352m, and capital expenditure rose by 11.1% year-on-year to £160m/$206.4m.

The UK hub handled a record 17.2m passengers (+2.2%) during the period, as the traffic lift coupled with the depreciation of the sterling and the emergence of Terminal 4’s luxury retail redevelopment helped spike gains in duty and tax free and airside speciality retail sales.

Underlying traffic growth is estimated to have been 4-5%, adjusted for the non-recurrence of 2016’s leap year and different timings of Easter in the two years.

UPGRADED FULL-YEAR FORECASTS

Growth in long-haul traffic (+2.6%) was driven by the Middle East (+13.1%) and Asia Pacific (+3.2%), with short-haul routes showing improved momentum, particularly across continental Europe (+1.8%).

Heathrow improved its year-on-year traffic by 0.9% to reach 76m for the 12 months to 31 March, but its growth lagged behind Madrid-Barajas Airport at +6.4% (51m PAX) and Amsterdam Airport Schiphol at +8.3% (64.6m PAX).

In an outlook statement, Heathrow noted the stronger than expected traffic performance, with further year-on-year improvements anticipated over the remainder of the year.

It added that full year 2017 traffic and financial forecasts are expected to be upgraded in its next investor report, due out in June.

In a Q1 investor document, Heathrow noted strategic aims such as focusing on cost efficiency and revenue development gains, as future expansion plans across its terminals “moves into delivery mode”.

John Holland-Kaye, Chief Executive Officer, Heathrow Airport said in a statement: “When Heathrow succeeds, Britain benefits and 2017 is shaping up to be our best year ever.

“Britain is plotting a new course in the world and expanding Heathrow is more important than ever to ensure its success. It will make our country the best connected in the world and secure our export-led future. We’re getting on with delivering it and look forward to opening Britain’s new runway in 2025.”