Passenger demand at a London airport may only recover in 2024. The lockdowns brought by the coronavirus pandemic has hit the airline industry.
“We think it will take three to four years for Gatwick to come back to 2019 passenger volume levels,” Stewart Wingate, chief executive officer of Gatwick, said in an interview with CNBC’s Steve Sedgwick.
Many airlines have either suspended or significantly reduced their flights due to travel restrictions imposed by governments to curb the coronavirus.
Passenger demand diminished at the London airport, Gatwick. It reported posted only 37 million passengers in the nine months to the end of 2019, a 0.3% increase from the same period the year before.
The airport is deemed under pressure after Virgin Atlantic and British Airways announced plans to decrease or assess their presence at Gatwick due to the coronavirus crisis. Virgin Atlantic said it will pull out their operations at the airport. On the other hand, British Airways said it is considering the possibility of stopping its services there.
“We are very hopeful that British Airways will continue flying, we think they will, we certainly are doing everything we can to persuade them to continue to fly to and from Gatwick and Virgin (Atlantic) are holding on to their spots, so in three or four years, they are telling us, they certainly intend to come back to Gatwick,” Wingate said.
Replacing new quarantine measures
The air travel industry calls on the UK government to remove or amend its new quarantine policy. The industry considers it a major obstacle to the reopening of businesses. Some travelers may postpone holiday plans in other countries as they are required to self-isolate for 14 days upon their return to the UK.
Wingate said that in mainland Europe“borders are coming down, the planes are starting to fly, and it is really important economically that we participate in this market.”
EasyJet’s CEO Johan Lundgren expressed the same sentiment.
“Everybody in the government recognizes that aviation is the big contributing factor as we now go into the economic recovery that’s so desperately needed … This quarantine approach is not efficient from a public health point of view and it should be replaced,” Lundgren said on CNBC.
EasyJet resumed their operations on Monday, after keeping its fleet on the ground for 11 weeks. EasyJet said in April that it could incur a loss of between £185 million ($230 million) and £205 million in the first six months of its fiscal year due to the coronavirus pandemic. The final figures will be reported later this month.
“I think it is too soon to start talking about opportunities that will come out of this, but of course as we see that we progress through the summer and we see demand growing again there will be plenty of opportunities down the line,” Lundgren said about potential expansion plans for the business.
Impact on airline industry
The financial damages brought by the coronavirus outbreak on the airline industry is evident, with airline executives cutting costs, freezing hiring, and reducing flights.
According to the International Air Transport Association, airlines worldwide could lose up to $113 billion in revenue in 2020, the most since the financial crisis, should COVID-19 continues to spread.
