Gatwick Airport publishes April to December 2019 financial results

Passenger numbers and revenue experienced an incline at London Gatwick Airport (LGW) for the nine-month period ending 31 December 2019, when compared to the same period in 2018. Approximately 37 million passengers journeyed through the airport during the period – an overall increase of 0.3 per cent. The annual results cover a nine-month period as Gatwick Airport’s aligns its reporting cycle with that of VINCI Airports, the airport’s 50.01 per cent shareholder.

However, since the end of the reporting period, the airport – and the wider aviation industry – has experienced unprecedented market circumstances and a dramatic decline in passenger numbers due to the impact of the COVID-19 pandemic. 

In response, Gatwick Airport has implemented a range of measures to protect the wellbeing of its staff and passengers, as well as shield the business in order to enable it to recover quickly post pandemic. Efforts to reduce the airport’s operational footprint include the temporary consolidation of operations into the South Terminal and limiting scheduled flights to between 14:00 and 22:00 each day. 

Both measures came into effect on 1 April 2020 and are being kept under regular review with a decision on returning to normal operations taken upon airline traffic and passenger demand increasing. Gatwick Airport is regularly engaging with the UK government, the airlines and other stakeholders to ensure that it is in the best possible position to rebuild the operation as quickly and as safely as possible, taking into account UK government public health advice. 

Actions to safeguard the financial resilience of the airport include reducing costs by deferring spending on the airport’s capital investment programme for the foreseeable future, putting over 90 per cent of eligible staff on the UK government’s Job Retention Scheme in order to preserve jobs, reducing the headcount of permanent staff through a special severance scheme and all staff taking a pay reduction.

Finally, to improve its liquidity, on 3 April 2020, the airport secured a £300 million loan with a consortium of banks. The company will not be paying a dividend in 2020. The airport expects all measures to enable a quick recovery of the business and currently expects post-COVID-19 passenger numbers will return to recent levels within 36 to 48 months. 

Stewart Wingate, CEO of Gatwick Airport, said: “The airport continued to grow in difficult market conditions during the period covered in these results. However, the world has changed dramatically since then and Gatwick has taken decisive action to ensure that it remains in a strong position to recover from the dramatic fall in passenger numbers and the wider impacts of COVID-19. The COVID-19 crisis has been unprecedented and our priority has been, and continues to be, maintaining the health and safety of our passengers and employees. We also have a resilient business and, by taking steps to reduce costs, we have protected jobs and expect to recover from this crisis.”

Wingate continued: “One measure we took to reduce costs was to defer spending on our capital investment programme to secure improved resilience. However, for future growth, we still expect to progress many of these projects, including our plans to bring the existing Northern (stand-by) Runway into routine use to offer more travel choice for passengers and new jobs for Gatwick and the wider region. Of course, any growth must be sustainable, and we also remain focused on our ongoing efforts to reduce the airport’s impact on the environment. I’m pleased to say that we continue to make significant progress in this area, and we are committed to reducing our environmental impact even further in the years ahead.”

Growth and development at Gatwick Airport in 2019

Gatwick’s growth and development during the period up to December 2019 took place across several key areas, including:

Passengers traffic increasing

• 36.9 million total passengers journeyed through the airport – an increase of 0.1 million (0.3 per cent), when compared to same nine-month period in 2018
• Growth was driven by long haul traffic, with long haul passengers increasing by 1.5 per cent
• Around one in five airport passengers travel long-haul.

Strong financial growth and capital investment

• EBITDA increased by 7.9 per cent to £432.3 million, due to continued strong revenue growth
• Income per passenger up increased by 6.0 per cent to £19.50, including retail income, which increased by £7.4 million (5.0 per cent)
• Capital investment was £174.4 million, compared to £173.2 million in the nine months to 31 December 2018.

Continued reduction in environmental impact at Gatwick Airport

• 71 per cent in waste recycling/reuse rate and reduction in airport energy and water use
• Reduction in carbon greenhouse gas emissions under Gatwick Airport’s direct control by 54 per cent (halfway to net zero), and maintenance of airport’s carbon neutral accreditation.