London Gatwick Airport (LGW) saw revenue from retail rise by +9.7% to £135m ($230m) in its 2013/14 fiscal year (ending March) – a good performance but lower than its overall revenue rise of +10.2% to £593.7m (1,011m) – see turnover analysis below for details.

 

However, retail – helped by 33 new store units being opened this year and its flagship WDF walkthrough open for the full fiscal period – strongly outstripped traffic growth at the single-runway airport where passenger numbers reached 35.9m, up +4.8%.

 

This ensured that net retail income per passenger increased to £3.72 (a rise of +4.2%).

 

LGW invested £201m ($342m) in the last fiscal year to transform the airport. The South Terminal departure lounge saw more than 20 new and refreshed stores open while the airport’s largest single project to date – a £183m ($312m) re-build of Pier 1 was started. When it is completed it will include a new baggage system for the South Terminal.

 

A further £195m ($332m) is planned to be invested in the next financial year.

 

Overall, LGW generated EBITDA of £259.4m ($442m) resulting in a profit of £57.5m ($98m). [For full comparative results see the table at the end.]

 

TRAFFIC ANALYSIS

The European market continued to be Gatwick’s largest market (82.8%) and it grew significantly by +6.3% (1.8m passengers). The majority (64.3%) of the overall total growth was generated by routes to Spain.

 

Middle East and Central Asian routes recorded the second-highest growth, mainly due to Emirates, which operated larger and fuller planes. Incumbent airlines such as easyJet, Norwegian Air Shuttle and British Airways continue to contribute the majority of the growth by increasing frequencies, operating new routes, and fuller planes.

 

In particular, Norwegian Air Shuttle’s traffic increased by +66.6% (0.9m passengers) against the same period in the prior year; 47.3% of this growth was due to 14  new routes including Barcelona, Alicante, Nice, and Las Palmas, with the remainder of the growth resulting from an increase in frequencies on existing routes and fuller planes.

 

New routes operated by easyJet including Moscow and Bergen and increases in frequencies on existing routes contributed to majority of the overall growth of +6.7% (0.9m passengers).

 

RUNWAY BATTLE WITH HEATHROW

The record passenger growth increased LGW’s share of traffic in the London market. Making its case for a second runway, against London Heathrow’s bid for a third strip, LGW says that it is growing faster than its competitor (+4.8% versus +3.0% over the same 12-month period).

 

Also in the two years from March 2012 it is the only airport – of the four that are considered London-serving – in which growth has been consistently better in each six-month period to March 2014 (see chart below).

 

 

Stewart Wingate (right), CEO of London Gatwick, says: “Gatwick’s record performance demonstrates how we are successfully competing in the London market and why we are best-placed to deliver the UK’s next new runway. Airlines and passengers are increasingly choosing to fly from Gatwick and this growth is expected to continue. And despite getting busier and handling growing numbers of passengers, we remain the top London airport for passenger satisfaction. 

“A two runway Gatwick would provide London and the UK with two world-class airports. It is, without a doubt, the obvious solution to creating the best future outcome for airlines, passengers and UK plc.”