Gatwick urges relaxation of Covid travel test rules

The government was urged by Gatwick today to simplify travel rules to improve passenger confidence in international travel.

The UK is in danger of continuing to lag behind Europe and the US whose much simpler travel regulations are enabling passengers to travel more freely.

Echoing a call from Manchester airport, Gatwick said ministers must not squander the benefits of the UK’s world leading vaccination programme to improve passenger confidence in international travel by “substantially simplifying” current travel requirement rules

The UK’s aviation recovery is far behind countries in Europe such as France and Germany whose travel bookings are on average over 50% of pre-pandemic levels whereas in the UK it is sitting at approximately 16%, according to the London area airport.

To simplify current travel rules and remove the prohibitive cost of Covid-19 testing for many passengers, Gatwick is calling on government to:

The demand came as the airport reported passenger numbers down to just 570,000 in the six months to June 30 from 7.5 million in the same period a year earlier due to the impact of Covid-19 and associated international travel bans.

While the airport remained open throughout this period all revenue streams were impacted and the collapse in passenger demand along with government restrictions led to a £244.6 million half-year loss and negative earnings [ebitda] of £50.2 million.

Cuts in capital expenditure resulted in the deferral or cancellation of more than £570 million from investment originally planned in 2020, 2021 and 2022.

Decisive action taken in 2020 reduced operating costs by 34.4% in the first half of the year through renegotiated contracts, temporary infrastructure shutdowns, halting discretionary expenditure and the continued consolidation of operations into one passenger terminal.

Staff costs were £31.3 million lower (46.4%) in the first half of the year due to the restructuring that was completed in the final quarter of 2020

The airport has £779 million of liquidity, including £624 million of cash, described as being sufficient to meet operating cashflows, planned investment levels and interest payments for at least the next 12 months.

“This ensures Gatwick is well placed for the recovery,” the airport said. “Gatwick has commenced a consent solicitation process to address forecast breaches in financial covenants, following successful discussions with its banks and with bondholders forming a special committee of the Investment Association.

Chief executive Stewart Wingate said: “In the UK we are all emerging to enjoy more freedoms due to our world class vaccination programme, however, we are in danger of squandering the advantage that vaccination programme has afforded us for international travel.

“Our government needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double vaccinated.

“UK travel recovery should not be allowed to lag behind the US and Europe.

“Passengers need the travel rules simplified so they can choose to travel more freely and enjoy much needed breaks and reunions with family and friends which are currently much more attainable for those in Europe and the US.”

The airport has seen the most challenging six months with low passenger and air traffic volumes, but Wingate insisted: “I remain certain that Gatwick will recover and as a business we are financially and operationally well placed for that.