Iran conflict drags down Gatwick profits as passenger numbers slide

London Gatwick has reported a near one-fifth drop in half-year profits after the war involving Iran deterred people from travelling internationally, cutting passenger volumes through the West Sussex hub.

The airport, the UK's second busiest, said pre-tax profit for the six months ending June 30 came in at £136.5 million ($186 million), an 18% decline from the £166.2 million recorded in the same period last year. Some 19.1 million travellers used its two terminals during the period, a fall of 4.7% year on year.

Routes spanning longer distances took the biggest hit, with long-haul traffic down 9.2% owing to the Middle East conflict, while short-haul numbers slipped 3.9%. Management noted that worries about jet fuel availability amid the fighting weighed on demand, although the airport has so far experienced no actual supply problems. It also said holidaymakers are increasingly holding off until nearer departure to book, while several budget carriers have trimmed their schedules in response to the tougher environment.

Underneath the headline profit fall, underlying trading was firmer: operating profit climbed 5% to £197.2 million on revenue up 4.8% at £515.2 million. Operating costs rose 5% to £318 million, with staffing among the fastest-growing items at up 7.4%. Parking income edged up 1.9% to £68.6 million.

Gatwick also trimmed its headcount earlier this year through a voluntary redundancy scheme that ran from December to February, leaving its full-time workforce 82 roles — or 3.1% — smaller year on year at 2,572 at the end of June.

The results were published weeks after the Court of Appeal rejected campaigners' attempt to overturn a June High Court decision clearing the way for the airport's controversial second runway. That ruling ended the legal challenge to the £2.2 billion Northern Runway project, which Transport Secretary Heidi Alexander approved in September of last year and which will shift the existing emergency runway 12 metres north to enable roughly 100,000 additional flights annually.

Chief executive Pierre Hugues-Schmit acknowledged the difficult conditions but struck an upbeat tone on the airport's prospects. "Despite a challenging geopolitical and economic backdrop, London Gatwick has continued to perform well," he said, adding that with the legal process now concluded, attention turns from planning to detailed design and delivery of the expansion.

The airport also pointed to continued airline interest, with seven carriers — including Jet2, Air France, Condor and Eurowings — joining in the first half of the year, followed by Air Zimbabwe and Air Arabia since July.