London Gatwick Airport returns to profit as traffic recovers strongly in first half

UK. London Gatwick Airport has reported half-year financial year results which show a return to profitability and a strong recovery in passenger numbers.

Revenue amounted to £291.5 million for the six months ending 30 June (down -21.7% versus H1 2019), with EBITDA at £148.3 million (-19.7% on 2019) and a profit after tax of £50.6 million (+6.1% on 2019).

Retail income across the period increased sharply year-on-year to £62.7 million, and was down -31.8% on the figure recorded in the equivalent period of 2019.

The significant improvement came after Gatwick worked closely with concessionaires to reopen specific units in the North Terminal and also reopen the South Terminal in March. The airport noted that this also created the opportunity for a new entertainment/electronics offering and a change of Bureau de Change operator.

Gatwick Airport retail revenues leapt in H1 after passengers returned in numbers to its North and South terminals

The airport reported that sales per passenger have been strong across most categories despite operational challenges resulting from staff shortages impacting opening hours and stock deliveries.

It observed that high income per passenger in the six months ended June 2021 was driven by a number of commercial arrangements including minimum guarantees. However, in H1 this year, net retail income per passenger decreased to £4.74 (from £12.67 a year ago), more in line with levels achieved in the corresponding period in pre-pandemic 2019.

Car parking income leapt from £1.6 million a year ago to £38.8 million in H1 and net income per passenger also climbed sharply to £2.40. The airport said the revenue growth stemmed from a combination of more passengers, a higher proportion of UK-based passengers, a broader product mix and high market prices reflecting constrained local supply.

On the traffic front, the airport served over 13.1 million passengers in the first half, aided by the recovery of 74.3% of pre-pandemic levels in Q2. Passenger numbers in the January-June period were 59% of the equivalent period in 2019 (22.2 million passengers).

Gatwick has revised its traffic forecasts for the full year 2022 to 32.8 million passengers following the strong recent demand. The airport however noted that continued macro-economic uncertainty – including inflationary pressures on costs – may impact this forecast.

Stewart Wingate expressed his confidence in a strong performance from Gatwick Airport in the second half of this year

The airport noted that demand through the half year period drove significant operational challenges across the entire aviation sector. In response, Gatwick said that it took early action to ensure reliable flight timetables by gradually increasing its declared capacity. It also recruited over 400 new security staff to reduce delays.

Gatwick also noted that it has provided staff to support other airport operators – including airline baggage handlers – as part of a continuous effort to improve their performance, reduce delays and return to high standard service levels.

Gatwick’s recovery has also seen its long-haul network grow, with 40 routes now announced.

Gatwick Airport Chief Executive Officer Stewart Wingate said: “We still have some way to go, but strong demand has fast-tracked Gatwick’s recovery from the pandemic, particularly in the last quarter since all UK travel restrictions were removed. Air traffic volumes have reflected this strong passenger demand and have bounced back to around 75% of pre-COVID levels.

“The unprecedented growth in traffic led to short term operational issues in June, however our decisive early action to limit the airport’s capacity in the crucial school holiday period of July and August has ensured passengers have experienced reliable flight timetables over the summer months. We are now very much operating business as usual and do not see any reason to extend the capacity declaration.

“Despite some broad economic uncertainty, we are also looking forward to a successful second half to the year, with new, exciting airlines and routes coming online and continuous improvement in the high service standards Gatwick is known for.”

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