Gatwick retail income per pax edges traffic growth in 12m

By Luke Barras-hill |

LGWresults18

Duty and tax free revenue grew by 6.4% in 2018

London Gatwick Airport (LGW) has reported a rise in retail income of +8.9% to £177.3m ($233m) for the 12 months ending 31 March.

Importantly, growth in net retail income per passenger (+4.9%) to £3.82 outstripped the hike in total passenger numbers (+3.6%) to 45.7m – itself an all-time high.

Duty and tax free revenue grew by 6.4% to £53.5m, with the opening of the revamped World Duty Free walkthrough store in the North Terminal in September lifting commercial returns in the second half of the year, with improved ranges driving spend per passenger.

Further retail highlights in 2017 included the opening of Reiss in the South Terminal and Superdry and Jack Wills in the North Terminal.

More recent arrivals included Hamleys in December and Kikki. K in March, with Gatwick continuing with its successful pop-up store strategy by welcoming back Havaianas at its terminals, in addition to a Cloud Spa unit at Gatwick North Terminal this summer.

FIRST UK-CHENGDU ROUTE

In a consolidated financial statement from parent company Ivy Holdco Limited, Gatwick Airport Limited reports that work continues to develop a number of new retail lots due to the shift of World Duty Free’s walkthrough store adjacent to the security area in the North Terminal.

As reported by TRBusiness [see above link] WDF is expected to introduce new ‘express’ and ‘collection’ outlets to fill those vacant spaces in due course.

In terms of passenger volumes, the uptick was driven by one million extra travellers in the long-haul segment (+14.4%).

Meanwhile passenger traffic on short haul European and domestic routes improved by 1.6%, with biggest airline easyJet growing its traffic by 5%.

DFresultsGatwick

The opening of the new WDF walkthrough at Gatwick North Terminal coupled with new speciality retail units and a concerted pop-up retail strategy yielded strong results for LGW. Source: LGW. Click to enlarge.

Next week, LGW will introduce the UK’s only direct service to Chinese tier one city Chengdu via Air China – bringing the airport’s total number of long-haul destinations to 67 while increasing its global connectivity.

Passenger numbers to China have leaped by 44% in the past year and the news will be music to the ears of incumbent retailers including as World Duty Free.

In the past year, LGW has introduced nine long-haul routes to destinations including Buenos Aires, Taipei and Singapore.

Gatwick says that the additional one million long-haul passengers it has generated means one in six now travel long haul.

RevshareLGW18

Total revenue rose by 5.4% to £764.2m. Source: LGW. Click to enlarge.

PAX 47M IN 2019

Overall revenue rose by 5.4% to £764.2m, with EBITDA up 10.1% to £411.2m and profit before tax at £233.7m.

In a forward looking statement, Gatwick is projecting 47.1m passengers to travel through the airport during the year ending 31 March 2019 – an increase of +3.1% year-on-year.

Nick Dunn, Chief Financial Officer, Gatwick Airport said: “As the country prepares for Brexit, it is critical that we continue to grow our long-haul links in addition to connections within the UK and Europe.

“We have ambitious plans to further enhance the experience for passengers at the airport, with a commitment to invest over £3 billion between 2010 – 2023, including an extension to Pier 6 providing six new aircraft stands, plus a new mezzanine level in the North Terminal departure lounge to accommodate new restaurants.

“Gatwick welcomes and is focused on the Government’s recent challenge to all airports to make the best use of their existing runways.

“It is vital that all airports are encouraged to increase capacity and we are exploring the best way Gatwick can continue to grow sustainably to support the local and national economy so that Britain can reap the benefits of greater global connectivity.”

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