Gatwick eyes business traffic to meet growth target

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London Gatwick Airport is hoping investment in upgrading its infrastructure can help it deliver on its aspirations of bolstering business and long-haul traffic as it aims to lift passenger numbers to 45 million,

The south London airport has been enjoying something of a new lease of life since Global Infrastructure Partners acquired it from BAA in late 2009. The airport has invested around £500 million ($780 million) in its first two years under new ownership, including a new security area in the South terminal and its recently opened North terminal expansion. At the same time it has secured a number of new routes, including AirAsia X switching Kuala Lumpar routes from London Stansted to Gatwick.

"For the first time it was liberalised to compete in the south east market," explained Gatwick Airport chief executive Stewart Wingate at a briefing in London. While long-term airport capacity development plans for London have hit the buffers, Wingate points to the existing potential to grow at Gatwick. "We will handle about 33.5 million passengers this year. We could grow the capacity to 45 million. We've got about 30% spare capacity today."

One of the central planks of its growth strategy is to better position it in the business travel market. Today just over a fifth of its passengers are carried by leisure operators, while another 47% come from low-cost operators. "We have a heritage as a leisure airport," said Wingate. "But as we go forward, particularly on the long-haul, we are seeing the development of more business travellers coming through."

The airport's chief commercial officer, Guy Stephenson, added: "Its very important that if we are to grow to 45 million passengers that we start to smooth out some of the seasonality. One of the things that will help us to do that is attracting more business traffic.

"Seventeen per cent of our passengers are already travelling on business and we think that is going to increase," he said. The airport hopes some of that shift will come from some existing carriers' moves to further target business traffic, notably its biggest operator EasyJet - which will base 50 aircraft at Gatwick next summer. In particular Stephenson hopes to see more density added on existing routes. "That is something a number of our airlines are working on, increasing frequency on domestic and European flights so they can compete for business traffic."

The other area it is hoping to grow is its long-haul offering. Currently 14% of passengers are long-haul, but the airport sees potential for this to reach closer to 20% over the next few years. Key to this growth is the opportunity from Asia, already evident by new flights to Gatwick from all-premium operator Hong Kong Airlines, Vietnam Airlines, AirAsia X and Korean Air.

"There is a lot of growth in that part of the world and there are still some countries that are not served with a direct service," said Stephenson, pointing to Jakarta in Indonesia as an example. "I think there are big opportunities in Asia. Because of the strength of London as a destination, for anyone terminating in London we think we are the best choice."