Gatwick increased its Government borrowing by £75m to shore up its finances during the Covid period
Gatwick has increased its Government borrowing by £75 million, trying to shore up its finances during the extended Covid travel reduction. It is thought that Gatwick has also borrowed £250 million under the Bank of England’s Covid Corporate Financing Facility (CCFF) scheme. Gatwick applied to access the CCFF in August, saying at the time it was a contingency measure and hoped not to touch the money, but now it needs the £250 million. It has 12 months to repay it. Gatwick still has the option of accessing a further £50 million under its £300million CCFF facility. The airport had a £344 million pre-tax loss for the six months to June 2020. During 2020 its number of passenger numbers fell by about 80%. It is owned by France’s VINCI Airports and $71billion fund GIP, which should be able to provide money Gatwick needs. Local community group GACC says, despite the airport’s dire financial state, it is still finding money to spend on expansion plans which will have major adverse consequences for local residents & would also fly in the face of climate change concerns.
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Gatwick increased its Government borrowing by £75m over the last week to shore up its finances during the extended travel shutdown
By HARRIET DENNYS, FINANCIAL MAIL ON SUNDAY
23 January 2021
Gatwick Airport increased its Government borrowing by £75million over the last week to shore up its finances during the extended travel shutdown. [This was announced by Gatwick at a public meeting a week earlier].
According to documents seen by The Mail on Sunday, the latest financing means Gatwick has borrowed £250million under the Bank of England’s Covid Corporate Financing Facility (CCFF) scheme.
Gatwick applied to access the CCFF in August, saying at the time it was a contingency measure and hoped not to touch the money.
Grounded: Gatwick, owned by France’s VINCI Airports and $71billion fund GIP, still has the option of accessing a further £50 million under its £300million CCFF facility
However, the lockdowns and travel restrictions have led to a situation where Gatwick has now accessed a total of £250million – and has 12 months to repay it.
A spokeswoman confirmed the loan had been drawn down ‘to preserve liquidity and protect the business while there is ongoing uncertainty regarding the length of time’ of the current air travel restrictions.
She added: ‘This loan gives the business some flexibility in case the state of affairs regarding international travel deteriorates further.’
Gatwick, Britain’s second biggest airport, cut 600 jobs last year. It posted a £344million pre-tax loss for the six months to June as passenger numbers fell by two-thirds.
The airport is currently operating from just the North Terminal, last week running just 20 to 30 flights a day, for around 1,000 passengers.
Before the pandemic, it was the world’s biggest single-runway airport. But last year, passengers were down 80 per cent on average compared with 2019, as airlines scaled back or suspended flights. And this month, Norwegian Air said it was closing its long-haul base at Gatwick, making 1,100 staff redundant.
The Mail on Sunday understands Norwegian is now dismantling its fleet of 35 Boeing 787 Dreamliner transatlantic jets, which will be sold or returned to leasing firms. Karen Dee, chief executive of the Airport Operators Association, warned last week airports could have to shut temporarily. There is speculation UK borders could be shut completely as soon as this week.
Paul Charles, chief executive of travel consultancy The PC Agency, said the restrictions could lead to several airlines going bust.
Gatwick last night urged the Government to announce ‘a comprehensive support package for aviation’.
It added: ‘It is vital that critical national infrastructure such as airports are able to thrive and provide the international connectivity required to ensure Britain remains open for trade and business.’
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Gatwick announced the £75 million at GATCOM last week but the detail won’t be seen (unless Gatwick do a press release, which is unlikely) until the Minutes are published.
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See earlier:
Gatwick investors say they will put in the money to develop its emergency runway for routine use
VINCI Airports and infrastructure fund GIP say they have committed to funding the next stage of a scheme to upgrade Gatwick’s ‘standby’ northern runway, for routine use. That would add around 90 extra flights per day. The northern runway is currently short, and is used as an emergency runway. It is too close to the main runway to be used independently, for safety reasons. But it could take short-haul planes in gaps between use of the main runway. Gatwick – struggling with the impact of the Covid pandemic – says it will now develop the development consent order (DCO) application for the project, including environmental surveys. The airport intends to launch a public consultation this summer. Gatwick’s biggest airline customers – BA, easyJet, Norwegian and Virgin Atlantic – have suspended or scaled back flights, or moved some to Heathrow. Gatwick hopes passenger traffic will recover fast, once vaccination against Covid makes it safer to travel, with traffic back to the level in 2019 by 2023. Gatwick claims the runway will not add to carbon emissions (as it does not include the emissions from flights). The CCC has said there should be no net airport expansion in the UK. If an airport expands, another should therefore contract.