Gatwick Profits Fall Amid Geopolitical Headwinds, Pushing Ahead with Runway Expansion
Airport reports an 18% drop in pre-tax profits to £136.5 million as passenger numbers decline, yet secures approval for second runway development.
Image: Eddie Pollard / AI
Sarah Connor
Gatwick Airport reported a significant drop in pre-tax profits for the first half of the year.
A financial downturn coincided with a 9.2% reduction in long-haul passenger numbers, alongside a 3.9% fall in short-haul passenger traffic.
Operating costs climbed by 5% to £318 million; the airport also reduced its security workforce by 3.1%, shedding 82 individuals through a voluntary redundancy scheme.
Despite these challenges, Pierre Hugues-Schmit stated, "Despite a challenging geopolitical and economic backdrop, London Gatwick has continued to perform well."
Gatwick Airport claims passenger demand was impacted by concerns over jet fuel supplies amid the ongoing conflict, though no shortages have occurred so far.
Travelers are reportedly booking closer to departure due to uncertainty caused by the conflict; some low-cost airlines cut flight programs in response to tougher trading conditions.
Despite a challenging geopolitical and economic backdrop, London Gatwick has continued to perform well.
Fewer passengers passed through Gatwick's terminals because of the Iran war, with a significant fall to destinations perceived to have an association with the Middle East conflict, including Cyprus, Turkey, Greece, and Northern Africa.
Costs have been impacted by several macro-economic factors, including wage inflation and higher utility costs, according to Gatwick Airport.
Seven new airlines, including Jet2, Air France, Condor, and Eurowings, reportedly joined Gatwick in the first half of the year, offering a counterpoint to the overall decline in passenger figures.
A Court of Appeal ruling has now cleared the path for the development of Gatwick's second runway, dismissing a bid by campaigners to challenge an earlier High Court ruling that the scheme could proceed.
The expansion, which received approval from Transport Secretary Heidi Alexander, involves moving the emergency runway 12 meters north to accommodate approximately 100,000 additional flights annually.
Pierre Hugues-Schmit added, "We are also excited about our longer-term growth opportunities and with the legal process for the Northern Runway Programme now complete, we can turn our focus from planning to detailed design work and delivery."