London Gatwick Profits Fall as Airport Plans Premium Shift

London Gatwick reported an 18% decline in pre-tax profits to £136.5 million for the six months ending June 30, down from £166.2 million the previous year. The airport attributed the dip to the war in Iran, which reduced total passenger numbers by 4.7% to 19.1 million. Long-haul travel suffered the steepest decline at 9.2%, specifically for destinations including Turkey, Greece, Cyprus, and Northern Africa.

Despite the profit decline, operating profits rose 5% to £197.2 million on revenues of £515.2 million. The airport is now moving forward with a £2.2 billion expansion to move its emergency runway 12 metres north. The project, approved by Transport Secretary Heidi Alexander and cleared by a Court of Appeal ruling in August, aims to accommodate roughly 100,000 additional flights annually.

To diversify revenue, the airport is upgrading hospitality services, valet parking, and lounges to attract premium travelers. This strategy aligns with a transition at EasyJet, the airport's largest customer, which is being acquired by Apollo Global Management for £5.7 billion. The U.S. private equity firm intends to shift EasyJet away from a traditional low-cost model toward business travel products and loyalty programs. Chief Executive Pierre-Hugues Schmit emphasized that the partnership with the airline remains essential despite the takeover.