Can bullish Gatwick bring pre-pandemic recovery full circle?
The aviation sector will be watching Gatwick Airport’s half year results with interest this Wednesday, to see how close the UK’s second biggest hub can get to its pre-pandemic heyday.
The West-Sussex airport has performed strongly this year and looks to be outshining its loss-making rival Heathrow, which continues to blame a cap on the amount it can charge airlines – rather than a pretty hefty debt pile – for an extended period in the red.
In its annual results in March, Gatwick swung into the green for the first time since Covid struck, reporting profits of £196.5m for the 12 months prior, up from a loss of more than £830m between 2020 and 2021.
And that pent-up demand has shown no signs of easing since, with numerous carriers – including its biggest resident airline Easyjet – either announcing or forecasting record profits for the year amid one of the busiest summers of travel in memory.
It has also coincided with a bullish period of activity in the airport sector and at Gatwick, who in July joined the long list of UK hubs currently fighting to expand capacity when it submitted plans for a £2.2bn second runway.
But there are still reasons to temper expectations of a post-Covid recovery.
The airport itself has struck a cautionary tone throughout the year, and its previous 2023 passenger forecast of 40.5m still keeps it at around 87 per cent of pre-pandemic levels.
It has also said it does not expect passenger numbers to normalise until 2025.
Future passenger figures will no doubt be affected by consistent flight disruption, which has been as much a staple of this summer as the aviation sector’s profit bonanza.
Gatwick then warned of flight disruption throughout the coming months due to “the knock-on effects of air traffic control restrictions across numerous parts of Europe”.
Major wildfires in Southern Europe and on the Greek island of Rhodes have also simultaneously seen airlines slash flights to the region.
And added to that has been the looming threat of strike action throughout the summer, with members of the Unite union announcing a number of walk-outs which were successfully averted after workers were offered pay increases.
Paul Charles, CEO of travel consultancy the PC Agency, said that Gatwick was “recovering very well and seeing huge passenger numbers return,” whilst attracting new airlines and seeing its existing carriers expand”.
Charles, however, noted that the airport had “much work to do on improving relations with ground handlers and their employees” suggesting that rival Heathrow had better industrial relations.