Gatwick airport reported an 18% drop in pre-tax profits for the first half of the year, falling to £136.5 million from £166.2 million a year prior. This decline is attributed to a significant decrease in passenger numbers, particularly to destinations perceived to be associated with the Middle East conflict.
Overall passenger traffic at the West Sussex airport decreased by 4.7% to 19.1 million. Long-haul journeys saw the steepest decline, down 9.2%, while short-haul passenger numbers fell by 3.9%. The airport noted that services to the Middle East region, though a small part of its business, were affected at significant levels and are recovering only progressively.
The uncertainty stemming from the Iran war has also influenced booking patterns, with more travelers opting for closer booking windows. Despite a challenging geopolitical and economic backdrop, the airport has begun to see stronger demand over the summer months.
In addition to geopolitical factors, Gatwick navigated higher operating costs, including a 5% increase in total operating costs to £318 million. These were impacted by factors such as wage inflation and increased utility costs. The airport also faced higher jet fuel costs, although it managed to avoid shortages due to its hedging strategy.
Looking ahead, Gatwick is preparing for a significant expansion. Following a Court of Appeal ruling in early August, the development of its second runway will proceed. This £2.2 billion project involves moving the emergency runway 12 meters north, which is expected to accommodate approximately 100,000 more flights annually. The airport is now shifting its focus from planning to the detailed design and delivery phases of this expansion.