Iran conflict drags down Gatwick profits as passenger numbers slide

London Gatwick has reported a near one-fifth drop in half-year profits, blaming a fall in passenger traffic caused by disruption to international travel from the war involving Iran.

The West Sussex airport 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 during the same period a year earlier.

Passenger numbers across its two terminals totalled 19.1 million in the first half, a decrease of 4.7% year on year. The damage was most acute on long-haul routes, where traffic fell 9.2% amid the Middle East conflict, while short-haul numbers slipped 3.9%. The airport, which ranks as the UK's second busiest and among the world's busiest operating from a single runway, noted that worries over jet fuel availability during the war had weighed on demand, although it emphasised no supply shortfalls have materialised. It added that travellers are increasingly holding off on bookings until closer to departure given the uncertainty, prompting some budget carriers to trim their schedules.

Underlying operating performance was stronger: operating profit rose 5% to £197.2 million as revenue climbed 4.8% to £515.2 million. Operating costs increased 5% to £318 million, with staffing accounting for more than a third of that spend after a 7.4% rise. Gatwick also confirmed it reduced its security team earlier this year through a voluntary redundancy scheme that ran from December to February, leaving its full-time headcount 82 lower — down 3.1% — at 2,572 at the end of June.

The results arrived shortly after the airport secured a major legal victory on its expansion plans. In early August, the Court of Appeal rejected campaigners' attempt to overturn a June High Court decision that cleared the way for a second runway. The £2.2 billion project, green-lit by Transport Secretary Heidi Alexander last September, involves shifting the existing emergency runway 12 metres north and would enable roughly 100,000 additional flights annually.

Chief executive Pierre Hugues-Schmit acknowledged the difficult conditions but struck an upbeat tone, saying the airport had continued to perform well despite the challenging geopolitical and economic environment. He added that with the legal process for the Northern Runway Programme now concluded, attention can shift from planning to detailed design and delivery.

There were signs of resilience elsewhere in the business. Seven new airlines began serving Gatwick in the first half — among them Jet2, Air France, Condor and Eurowings — with Air Zimbabwe and Air Arabia following since July. Revenue from car parking also edged up 1.9% to £68.6 million over the period.