Gatwick net retail income per passenger rises +2% in first half

“This is just the start of what Gatwick has to offer“

Stewart Wingate CEO Gatwick Airport

UK. Gatwick Airport posted an encouraging +2% rise in net retail income per passenger (to £3.55/US$5.75) for the six months ended 30 September 2013, amid an unprecedented development of commercial services.

Net car parking revenue per passenger surged by +15.7% to £1.47 (US$2.38).

Overall airport turnover rose +10.7% to £360.6 million (US$584.4 million). Combined with tight cost management, this resulted in EBITDA up +14.4% to £196.7 million (US$318.8 million) and a pre-tax profit of £127.3 million (US$206.3 million).

Passenger traffic reached 20.8 million, up +4.4%. However, underlying growth was +3.5% as the Olympic Games reduced traffic by an estimated 170,000 passengers in 2012.

The results were partly driven by the largest retail development in Gatwick’s history, which has seen 23 retail (including food & beverage) redevelopment projects over the past year alone.

Summer 2013 saw a record number of new store openings in the South Terminal in one day, including a new 6,000sq ft Harrods department store. The terminal opened 11 new outlets in the first half year.

The £45 million South Terminal retail development completes in December when several new brand stores launch, including Victoria’s Secret, Zara, Joules, Superdry, Snow & Rock, Ted Baker and Fat Face [The Moodie Report will produce a special on location profile of Gatwick Airport next month and in the January/February Trinity Forum issue of our Print Edition. London Gatwick Head of Retail Spencer Sheen is set to be a speaker at The Trinity Forum in Bangkok on 26-28 February, 2014].

Solid first-half revenue growth was recorded in aeronautical, retail and (particularly) car parking revenue

The enhanced commercial offer was a prime influence in Gatwick moving from 12th to sixth place in the European sector of the Airport Service Quality (ASQ) benchmark [see chart] since 2009, the company noted, “proving that it continues to deliver exceptional customer service and operational performance”.

Gatwick achieved both a record score and its highest-ever position in the ASQ European rankings, despite an increasing survey size.

The strong car parking result came from improved yield management in peak season; an increased range of premium products; for example, valet services; and new offers, including a hotel park and stay service.

Traffic growth came mainly from European short haul, particularly from Norwegian which launched 12 new routes, and increasing business services from easyJet and Turkish Airlines.

Long haul routes outside of North America continue to grow with Vietnam Airlines increasing frequencies, the company said.

By the end of the year, 22 new stores will have opened in the South Terminal

London Gatwick CEO Stewart Wingate commented: “Gatwick will celebrate four years of new ownership in December. In this time we have turned around decades of underinvestment to enable Gatwick to emerge as a competitive, world-class airport. Our results today show a strong financial performance but we must not become complacent. We must continue to invest and ensure we remain competitive.

“Gatwick continues to attract new airlines and routes, which were once only the domain of Heathrow. We now serve routes as diverse – and strategically important for the UK – as Moscow, Beijing, Istanbul and key cities in Vietnam. Substantial growth continues to come from our extensive European network. Next year, we will continue to grow our long haul network with routes including Jakarta, New York and Los Angeles.

“This is just the start of what Gatwick has to offer. A new runway here would deliver the routes that passengers actually want at a better price, more quickly and with significantly less environmental impact. The UK’s next runway has got to be at Gatwick.”

Gatwick’s enhanced ASQ performance underlines the power of good retail and food & beverage to positively influence consumer perception of an airport