Gatwick in talks with lenders, after losing another £245 million in the first half of 2021
Gatwick says it made a loss of £245m in the first half of 2021, as passenger numbers collapsed to 569,000. It expects to have 9 million passengers by December, but that is lower than the 10 million in 2020. In 2019 it had 46.5 million. The airport is now in talks with its lenders to ease the terms of its loans, due to the losses. It lost £465.5 million in 2020. Due to its weak finances and continuing low demand for air travel, Gatwick has asked its lenders to agree to short-term waivers on its loans to avoid it defaulting. This was also done last year, and the same thing happened at Heathrow. Virgin Atlantic, one of Gatwick’s longest-standing airline customers, has ceased its operations at Gatwick for now, while British Airways has moved all of its short-haul flights to Heathrow, due to the low level of demand. However, BA said it will continue with at least long-haul operations from Gatwick. The airport said it had 779m of liquidity at the end of June, which it hopes would last it for the next 12 months, with no more staff being made redundant. It has cancelled or deferred more than £570m of capital spending that had been planned for 2020, 2021 and 2022.
Gatwick Airport announces almost £250 million loss so far in 2021
By Connor Stringer, Reporter @connor_stringer (The Argos)
13th August 2021
GATWICK lost £244.6 million during the “most challenging six months the airport has witnessed”, it has been announced.
The forced travel bans and a collapse in demand saw just 569,000 people pass through the airport from January to June.
Citing expensive PCR tests and long isolation rules, bosses said the government “needs to act now” to allow a return of freedom of travel – or risk lagging behind Europe
The airport was forced to reduce operating costs by 34.4% in the first half of the year through the renegotiated contracts and temporary infrastructure shutdowns.
As a result, staff costs are £31.3 million lower (46.4%) in the first half of the year.
Gatwick Airport, Chief Executive Officer, Stewart Wingate said: “First I would like to thank all our staff for their hard work and fortitude throughout what has no doubt been the most challenging six months the airport has witnessed with its low passenger and air traffic volumes.
“I remain certain that Gatwick will recover and as a business we are financially and operationally well placed for that.
“In the UK we are all emerging to enjoy more freedoms due to our world class vaccination programme, however we are in danger of squandering the advantage that vaccination programme has afforded us for international travel. Our Government needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double vaccinated.
“UK travel recovery should not be allowed to lag behind the US and Europe. Passengers need the travel rules simplified so they can choose to travel more freely and enjoy much needed breaks and reunions with family and friends which are currently much more attainable for those in Europe and the US.”
Since March, people dropping off travellers have been had to pay £5 to access the airports North Terminal forecourt.
It is hoped the charge will reduce traffic congestion and emissions for the surrounding area.
Visitors also have to pay £5 for 10 minutes, and £1 for each additional minute up to 20 minutes.
The maximum charge is £25 and the maximum length of stay 30 mins.
Gatwick in talks with lenders amid Covid losses
Gatwick Airport has said it is in talks with bank lenders to avoid defaulting on loans as Covid restrictions contribute to huge losses.
The UK’s second biggest airport said travel restrictions and the coronavirus collapse in demand meant a £204m pre-tax loss in the first half of the year.
Gatwick urged the government to ease travel rules, warning the UK recovery was falling behind the rest of Europe.
But the government said its “top priority is to protect public health”.
Gatwick said that a year after requesting short-term waivers on its loans, it was under pressure again and has asked banks for another extension.
It said in a statement the government “needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double vaccinated”.
With three quarters of UK adults double vaccinated, the government should “improve passenger confidence in international travel by substantially simplifying its current travel requirement rules”, the airport said.
“The UK is in danger of continuing to lag behind Europe and the US whose much simpler travel rules are enabling passengers to travel more freely and enjoy much needed breaks and reunions with family and friends,” it said.
“The UK aviation recovery is far behind countries in Europe such as France and Germany whose travel bookings are on average over 50% of pre-pandemic levels whereas in the UK it is sitting at approximately 16%,” it added.
Coronavirus has hit Gatwick hard, with woes including Virgin Atlantic announcing in May that it would quit the airport.
The article continues, about the aviation sector wanting fewer government restrictions on Covid ….
Gatwick in talks with lenders as losses mount
UK’s second-busiest airport posts first-half net loss of £245m. In the first half of 2019, before the pandemic hit, 22.2m passengers used Gatwick airport. That fell to 569,000 in the first half of this year
By Philip Georgiadis and Oliver Ralph (Financial Times)
AUGUST 13 2021
Gatwick airport is in talks with its lenders to ease the terms of its loans after losses mounted in the first half of the year disrupted by the pandemic.
The UK’s second-busiest airport has been badly hit by restrictions on international travel, and on Friday reported a net loss of £245m in the six months to the end of June as passenger numbers collapsed to 569,000.
The airport’s executives expect passenger numbers to rise to 9m by the end of the year as demand for flying gradually increases, but that would be below the 10m people who used the airport last year. In a normal year, Gatwick would expect about 40m passengers.
“In common with just about everybody else in the sector, we didn’t anticipate having passenger volumes in 2021 that would end up being lower than we saw in 2020,” Gatwick’s chief executive Stewart Wingate said.
As a result of the losses and continuing weak demand for travel, Gatwick has asked lenders to agree to short-term waivers on its loans to avoid it defaulting. The airport and its lenders agreed to similar waivers last year, as has larger rival Heathrow.
Gatwick, located about 25 miles south of central London, is currently only using one of its two terminals.
Virgin Atlantic, one of Gatwick’s longest-standing airline customers, has closed its operations at the airport for now, while British Airways has moved all of its short-haul flights to Heathrow as its cuts flights because of low demand.
However, in a boost to the airport’s longer-term ambitions, Wingate said BA had signalled it would “definitely” continue to run at least long-haul operations from Gatwick.
Gatwick had £779m of liquidity at the end of June, which it said was enough to last it for the next 12 months, and Wingate promised no staff would lose their jobs after the UK’s furlough scheme winds down at the end of next month. The airport employs 1,750 staff, down from 3,300 before the pandemic.
Gatwick has cancelled or deferred more than £570m of capital spending that had been planned for 2020, 2021 and 2022, and reduced its operating costs by more than a third by temporarily shutting down some infrastructure and halting discretionary spending.
“I remain certain that Gatwick will recover and as a business we are financially and operationally well placed for that,” Wingate said.
Wingate called for more changes to the UK’s travel rules, saying that the country was “in danger of squandering the advantage that the vaccination programme has afforded us for international travel”.
“Our government needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double- vaccinated,” he said. “UK travel recovery should not be allowed to lag behind the US and Europe.”
Gatwick made a £465.5m loss in 2020 as passenger numbers collapsed due to Covid
Gatwick Airport made a £465.5m loss in 2020 due to Covid. While the airport remained open all of 2020, passenger numbers fell by 78% as lockdowns and travel restrictions took their toll. All its revenue streams were affected and its loss before interest, tax, depreciation and amortisation (EBITDA) was £25.1m. The airport cut over 40% of its workforce as a result of the travel slump. The airport’s CEO Stewart Wingate wants the government to provide further financial support by extending the furlough scheme and providing full business rates relief for airports for the current financial year, not just the £8 million on offer. Gatwick said it reduced operating costs by £140m last year and deferred more than £380m from the investment originally planned for 2020 and 2021. In April 2020 it got a £300m loan from a consortium of banks, and it has had £250m under the Bank of England’s Covid Corporate Financing Facility. It has been granted a waiver to address breaches in Financial Covenants at 31 December, 2020. In December it had liquidity of £573m to meet cashflow, investment levels and interest payments for this year.
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.