London’s Gatwick Airport has announced a £244.6m loss for the six-month period ended 30 June, 2021and negative EBITDA at -£50.2m. A strategic and sustained reduction in capital expenditure resulted in the deferral or cancellation of over £570m from investment originally planned in 2020, 2021 and 2022. The airport reduced operating costs by 34.4% in the first half of the year through renegotiated contracts, temporary infrastructure shutdowns, halting discretionary expenditure and the continued consolidation of operations into one passenger terminal. Staff costs are £31.3m lower (46.4%) in the first half of the year due to the restructuring that was completed in Q4 2020.
As of 30 June 2021 Gatwick maintains that it has a strong liquidity position with £779m of liquidity including £624m of cash, which it states is sufficient liquidity to meet operating cashflows, planned investment levels and interest payments for at least the next 12 months. However, Gatwick has commenced a consent solicitation process to address forecast breaches in financial covenants, following successful discussions with its banks and with bondholders forming a special committee of the Investment Association.
The UK airport company reported “very low” passenger numbers at just 569,000 in the first six months of the year due to the impact of COVID-19 and the associated international travel bans.
With over 75% of UK adults double vaccinated, Gatwick has called on the UK Government “to take advantage of its world leading vaccination programme to improve passenger confidence in international travel by substantially simplifying its current travel requirement rules”, warning that the UK was in “danger of continuing to lag behind Europe and the US whose much simpler travel rules are enabling passengers to travel more freely”.
The UK aviation recovery is far behind countries in Europe such as France and Germany whose travel bookings are on average over 50 per cent of pre-pandemic levels whereas in the UK it is sitting at approximately 16 per cent.
Gatwick is calling on Government to: have no test requirements for travellers from “green” countries,
or for double vaccinated travellers from “amber” countries and a single lateral flow testing for those non-vaccinated from an “amber” country.
Gatwick Airport, Chief Executive Officer, Stewart Wingate said: “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.”