- By Region
Route expansion by EasyJet and British Airways this summer helped boost the number of passengers travelling through Gatwick airport by an underlying 3.3 per cent from last year, while a policy of cutting landing charges in winter lured in new carriers, including Air Asia X, Hong Kong Airlines and Lufthansa.
Performance at the UK’s second-biggest airport in the six months to September was flattered by last year’s figures, when volcanic ash prompted multiple closures of northern European airspace; disregarding that hit, passenger volumes rose by 8.5 per cent year-on-year.
But taking it into account, Gatwick outperformed capacity-constrained Heathrow during the summer holidays. Heathrow passenger numbers rose just 1.5 per cent in the third quarter, and 6.1 per cent for the ninth months through September.
BAA, which runs Heathrow, sold Gatwick to a consortium led by Global Infrastructure Partners in December 2009, after an order by regulators to divest certain airports. In the year to March 2010, Gatwick’s passenger traffic fell 2 per cent, thanks partly to the downturn but also as carriers switched to Heathrow.
Since the sale, Gatwick’s operators have focused on punctuality and turnround times, invested in upgrades to the retail space and introduced a policy of eliminating landing charges during the winter in order to encourage year-round use of the world’s busiest single-runway airport.
“Future passenger growth is dependent upon making the most efficient use of our single runway,” said Stewart Wingate, chief executive.
The restructuring of landing charges also means higher prices in summer, which larger aircraft are better able to absorb. “If you choose to operate in the peak, you need to pay your way,” said Nick Dunn, chief financial officer.
Airlines such as EasyJet have embraced the move, while regional airline Flybe filed a complaint with the Civil Aviation Authority. An early decision backs Gatwick, which argues it is not discriminating on aircraft size but “incentivising the efficient use of infrastructure”.
“It’s an interesting and aggressive use of peak/off-peak pricing variations,” said Gerald Khoo at Espirito Santo. “You can’t get more aggressive than on/off.”
Revenues rose 15 per cent from last year, and earnings before interest, tax and depreciation – and before exceptionals of £2.2m – jumped by more than a third, to £164.4m, helped by reductions in IT and other costs. In the first full year under new ownership, Gatwick’s operating costs fell 6.5 per cent – and have stayed at lower levels in the first half of this year.
But the airport is prospering on the back of airline strategies that have some analysts concerned – particularly over capacity growth amid an uncertain economy. Gatwick itself expects 1.5 per cent passenger growth next summer, slower than this summer’s results. “From a demand side, we’re a bit cautious,” said Mr Dunn.