Gatwick airport has reported a £343m pre-tax loss after passenger numbers plummeted by two-thirds in the first half of the year, as the coronavirus takes a heavy toll on the aviation industry.
Britain’s second-busiest air hub, which earlier this week announced plans to cut 600 jobs, said revenues had plunged by 61% in the first half from £372m to £144m.
Gatwick is operating flights from only one of its two terminals and said passenger numbers had fallen by two-thirds year on year in the first six months, from 22 million to only 7.5 million. The airport is forecasting it will take four to five years for air traffic levels to return to pre-pandemic levels.
“The negative impact of Covid-19 on our passenger numbers and air traffic at the start of the year was dramatic and, although there are small signs of recovery, it is a trend we expect to continue to see,” said Stewart Wingate, the chief executive of Gatwick airport. “As with any responsible company we have protected our financial resilience by significantly reducing our operational costs and capital expenditure.”
The company, which said passenger numbers were down 80% year on year this month, is slashing capital expenditure by more than £300m over the next two years and has cut costs by in excess of £100m. More than 70% of staff remain on furlough.
Gatwick’s dire results come as Norwegian, traditionally one of the airport’s four biggest customers, reported a $610m (£459.1m) first-half loss and warned that it needed another cash injection.
Norwegian, Europe’s third-largest low-cost airline, said passenger numbers had dropped 99% in the second quarter. The airline, which already has a $340m loan guarantee from the Norwegian government, said it would not be enough to get it through the crisis.
Royal Schiphol Group, the operator of airports in the Netherlands, is to cut several hundred jobs after reporting a €246m (£220.6m) loss in the first half. The state-owned group, which employs 3,000 staff, said passenger traffic had declined 62% year on year in the period. RSG, which operates airports in Rotterdam, The Hague and Eindhoven, is seeking to cut costs by 25% by 2022.
In April, British Airways said it planned to drastically cut back its operation at Gatwick as part of a plan to make 12,000 redundancies.
Last month, Heathrow airport reported a £1bn loss in the first half as passenger numbers fell by 96% in the second quarter. John Holland-Kaye, the airport’s chief executive, accused the government of playing “quarantine roulette” by failing to introduce a passenger testing regime at the UK’s major entry points.
Wingate said the government needed to look at adopting the policies of some other European countries that have seen air travel pick up faster because they are not making snap decisions to introduce quarantines.
“The way other countries are operating seems to have led to more activity at their airports,” he said. “Should we just be using the infection rate – 20 per 100,000 people – [as the threshold to introduce quarantine measures] or should we also be looking at things like hospitalisation rates?
“We want to work with government to see if there are other factors that should be taken into account to make the decision to open or close the travel corridors. Can we make better decisions by broadening the data set we use?”