Gatwick profit lifted by emerging markets

City A.M. Reporter
Gatwick airport reported a strong rise in full-year profit, helped by traffic growth and the addition of new routes to emerging markets in Asia.

London's second largest airport after Heathrow, saidits earnings before interest, taxes, depreciation, and amortisation rose 17 per cent to £221.5m in the year to the end of March. Revenues rose 8.6 per cent to £517.4m.

Gatwick, owned by Global Infrastructure Partners (GIP) - an investment fund founded by Credit Suisse and General Electric - said passenger traffic grew 6.9 per cent to £33.8m, boosted by its investment programme and new routes to emerging markets.

"We have been winning new connections to high growth economies including South Korea, Turkey, Vietnam, Hong Kong and China," said Gatwick's chief executive Stewart Wingate.

Rival London airport Heathrow is operating at full capacity after Britain's Conservative-led coalition government blocked development of a third runway when it came to power in 2010 as further expansion of the west London site would mean a huge increase in the number of planes flying directly over the capital.

Heathrow, operated by BAA, has seen traffic to emerging markets rise in recent years and believes it is now falling behind other airports in the battle for these lucrative routes because of constraints on growth.

Birmingham airport, in the English Midlands, on Monday published a report saying it had spare capacity to ease the strain on Heathrow.

GIP bought Gatwick for £1.5bn from Ferrovial-owned BAA in 2009 and has since focused on improving the airport's facilities.

"Passengers and airlines are benefiting from new facilities and we are currently investing around £20m per month," said Wingate, who added that a further £435m would be invested over the next two years.

In the last three years GIP has invested £750m modernising its two terminals and revamping its security, baggage and inter-terminal shuttle services.