Gatwick retail revenue grows +8.3% but duty free spend per passenger hampered by introduction of tobacco plain packaging

UK. Gatwick Airport has confirmed continued growth across revenue, retail income and passenger numbers underlined by increasing global connectivity in its interim results for the six months ending 30 September 2017.

Retail income grew +8.3% like-for-like to £98.1 million (US$130.5 million) with an increase in spend per passenger of +3.1% to £3.67 (US$4.88). Duty and tax-free performance improved by +3.6% to £29.1 million (US$38.71 million) but the airport said ongoing challenges resulted in a -1.8% reduction in spend per passenger. A significant cause of the decline was the introduction of plain tobacco packaging in May 2017.

Gatwick Airport’s overall revenue increased +5.5% to £469.7 million (US$624.84 million). EBITDA was up +9.9% to £290.6 million (US$386.58 million). Profit before tax reached £140.7 million (US$187.17 million).

“Gatwick has blazed a trail in the last six months delivering record growth in passenger numbers and record breaking new long-haul routes while also setting new standards for customer service” –Gatwick CEO Stewart Wingate

Source: Gatwick Airport

The six-month period was the busiest in Gatwick’s history with 26.4 million passengers, an increase of +5.1% or 1.3 million passengers. The airport announced eight new long-haul routes in the past six month,s including Singapore, Taipei and Buenos Aires.

Gatwick CEO Stewart Wingate said: “Gatwick has blazed a trail in the last six months delivering record growth in passenger numbers and record-breaking new long-haul routes while also setting new standards for customer service.

“Gatwick now serves 45.5 million passengers each year and is playing a vital role for Britain. As we prepare for Brexit, it is critical that we continue to grow our long-haul links in addition to connections within the UK and Europe.”

Retail review

Source: Gatwick Airport

Retail highlights included the opening of a new walk-through World Duty Free store in the North Terminal in September 2017; the arrival of clothing brand Reiss in the South Terminal in May; and the first phase of Gatwick’s £124 million (US$164.96 million)North Terminal Development Plan including a new Jack Wills store and new units for Cath Kidston and Superdry.

Jack Wills, Cath Kidston and Superdry are all part of the North Terminal redevelopment plan

The new walk-through store is part of the North Terminal’s redevelopment. The airport expects to reap the full benefits of the store in the second half of the year. The Moodie Davitt Report will bring you a full report from the store’s official opening next week.

Customer satisfaction remained strong in the first six months, said the airport. Over 85% of Gatwick’s passengers ratedits retail and food & beverage outlets as either ‘good’ or ‘excellent’.

Gatwick’s upgrade in retail and F&B has received positive feedback from passengers

Specialist shops’ income grew +8.6%, exceeding passenger growth and helped to increase income per passenger by +3.1%.

Gatwick hailed its successful pop-up strategy, which continues to develop with new brands Skinny Dip and Cloud Spa introduced in the North Terminal and Havaianas returning in both terminals.

F&B continued to perform strongly, delivering +11.4% income growth and +6.8% increase in spend per passenger. The expansion of the Flying Horse pub and opening of Jamie Oliver’s Diner in the South Terminal resulted in increased capacity and sales.

F&B delivered +11.4% income growth driven by increased capacity and sales at concepts like Jamie’s Diner

Units which opened last year, such as Starbucks, also had a positive impact on average spend per passenger. Foreign exchange business income increased +14.6% as a result of revised contract terms, increase in passenger volumes, change in passenger mix, and currency fluctuations.

Global connectivity

Gatwick Airport said it had reinforced the vital role it plays in the local, regional and national economy as it continued to increase its lead as the world’s busiest single-runway airport.

The airport has expanded global connectivity with a +12.4% increase in long-haul routes versus the same six months last year.

Gatwick has cemented its place as the world’s busiest single-runway airport as it expands its global reach

Before the end of the financial year Gatwick will add further global connections to Taipei, Buenos Aires, Chicago and Austin, building on new routes to Singapore, Rwanda, Seattle and Denver in the past six months. Gatwick’s domestic routes saw a passenger traffic increase of +5.3% in the period.

Gatwick remains committed to its bid for expansion

Gatwick Airport is continuing its bid for airport expansion. “We are currently preparing our full submission to the Government’s re-opened National Policy Statement consultation,” said Wingate. “We are planning future submissions to support the Aviation Strategy in which we will detail the plans we have to continue to make best use of the airport’s existing facilities.

“Gatwick is ready to play an increased global role for Britain as we grow. Gatwick is prepared to build our financeable and deliverable second runway scheme so that Britain can reap the benefits of greater global connectivity faster,” he added.

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