Despite an encouraging start to 2020, passenger numbers at Gatwick fell 78% in the year ended December 31, 2020 due to the impact of COVID-19.
The airport remained open throughout the pandemic, however all revenue streams were impacted and the collapse in passenger demand led to a £465.5m loss for the twelve-month period and negative EBITDA at -£25.1m.
Decisive and swift action was taken to protect the financial strength of the business. A strategic reduction in capital expenditure resulted in the deferral of over £380m from the investment originally planned in 2020 and 2021. Operating costs were reduced by over £140m in 2020 through a variety of actions including restructuring and reducing staffing levels by over 40%, renegotiating contracts and consolidating all air traffic and passengers into one terminal.
To improve liquidity, in April 2020 Gatwick secured a £300m loan with a consortium of banks and the company has drawn £250m under the Bank of England’s Covid Corporate Financing Facility.
The group has been granted a waiver to address breaches in Financial Covenants at December 31, 2020. As of December 2020 Gatwick had available liquidity of £573m to meet its operating cashflows, planned investment levels and interest payments for 2021.
Gatwick Airport, Chief Executive Officer, Stewart Wingate made the followin statement:
“It will come as no surprise that, like any other international airport, the negative impact of COVID-19 resulted in a financial loss for the business last year which sadly also saw us need to reduce our workforce by over 40%. I would like to thank all our staff, including those that have left us, for all their hard work and determination throughout these difficult times.
“Despite the immediate challenges I remain optimistic that Gatwick will recover and retain its position as one of Europe’s leading international gateways and an economic driver for the UK’s south east region. Due to our swift actions the business remains resilient and robust with our focus on ensuring we are best placed to take advantage of a return to international travel this summer.
“We are heartened by the UK Government’s COVID-19 response plan and look forward to working with the Global Travel Taskforce to develop a framework that can facilitate greater international travel as soon as possible. This will require the UK Government working with other Governments, to ease the current crippling travel restrictions and ensure a consistent, reciprocal approach for all travellers in time for this summer.
“Restoring passenger confidence and offering COVID-19 safe air travel while minimising the need for cost prohibitive testing and disruptive quarantine measures is vital. Before air travel recovery begins, and in order for the industry to continue to protect as many jobs as possible, we also need the UK Government to provide further support by extending the furlough scheme for a few more months and providing business rate relief, as airports in Scotland have been afforded, for the current financial year.”
