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Gatwick Chief Vows No More ‘Second Child’ to Heathrow

An airline passenger makes his way through Gatwick airport
An airline passenger makes his way through Gatwick airport in Crawley, Sussex, on Oct. 21, 2009. Photographer: Chris Ratcliffe/Bloomberg

London’s Gatwick airport plans to cut fees, improve rail links and lure long-haul carriers in a bid to boost the annual passenger count as much as 40 percent and better compete with the U.K. capital’s dominant Heathrow hub.

Infrastructure improvements and more competitive rates for airlines could help lift traffic at Gatwick, already the world’s busiest single-runway airport, to as many as 45 million people, Chief Executive Officer Stewart Wingate said in an interview.

Global Infrastructure Partners, which bought Gatwick from BAA Ltd. for 1.5 billion pounds ($2.4 billion) in 2009, aims to establish the asset as a London gateway for services that don’t require onward links, distinguishing it from Heathrow, Europe’s biggest hub airport. Wingate, who once worked for Heathrow owner BAA, said Gatwick was held back under the previous regime.

“As the second child in the family you’re in a difficult situation,” Wingate said. “Gatwick is easily the next-biggest U.K. airport after Heathrow, but it was never treated half as well as what is perceived to be the jewel in the BAA crown.”

Gatwick forecasts a passenger total of about 32 million this year, little changed from 2009, when the airport ranked eighth-busiest in Europe and No. 31 in the world. Heathrow, with 66 million passengers, was second globally, behind Atlanta.

Long-Haul Return

Traffic at Gatwick peaked at 35.4 million passengers in 2007, before the global recession. Wingate said numbers will rise as EasyJet Plc, Gatwick’s largest carrier since British Airways Plc stopped using the airport as a major hub, reconfigures its fleet toward denser seating and Ryanair Holdings Plc introduces more flights as it reduces services at BAA’s Stansted base, north of London.

Only 18 percent of takeoffs and landings at Gatwick are currently for long-haul flights, with 50 percent for short-haul trips and 32 percent for charter operations.

“We do see long-haul growth returning to Gatwick, and there’s no reason why that shouldn’t be the case,” the CEO said. “Heathrow is an alliance hub and that’s the majority of their activity, but there is certainly quite a bit of point-to-point business to be had on the periphery of that.”

Technological improvements should also permit more aircraft movements with Gatwick’s sole runway than the current peak of 52 an hour and infrastructure enhancements will also bring in more long-haul carriers using larger wide-body planes, the CEO said.

Lower Fees

The landing fees charged to airlines will be cut by using a 1 billion-pound funding pot more efficiently and passing on 100 million pounds of savings, Wingate said. Gatwick’s fees are regulated by the U.K. Civil Aviation Authority every five years, with the permitted tariffs based on the amount invested.

“We’re in the richest catchment in the U.K. by far,” the CEO said. “You just need to get the balance right between the quality of the service and the cost of the product and we’re focused on improving the service we provide for a fair price.”

Global Infrastructure Partners plans to part-fund construction of a dedicated platform at Gatwick’s railway station for the sole use of airport trains. Current services are provided as part of the Southern rail franchise and carriages are sometimes packed with commuters.

Luggage Checks

Delays that had made Gatwick notorious among travelers have been addressed via new procedures for hand-luggage checks which aim to process 95 percent of all outbound passengers within five minutes. The airport has consistently achieved that goal this summer, having repeatedly fallen short under BAA, Wingate said.

Security checks at Gatwick’s South Terminal will be further streamlined when a single checkpoint replaces a three-zone system, with work scheduled to be finished by 2013 being brought forward for completion before London hosts the 2012 Olympics.

Baggage delays are being combated with the publication next to carousels of league tables of the best- and worst-performing airlines to spur help them to lift performance, the CEO said.

Refurbishment of the monorail that runs between Gatwick’s two terminals was completed in July and a new car park is being built at the North Terminal.

Wingate said that New York-based Global Infrastructure Partners, which is backed by Credit Suisse Group AG and General Electric Co. and also controls London City airport, is likely to seek another investment partner for Gatwick, with “one more little parcel of equity sold off.”

The California Public Employees Retirement System, the largest U.S. public pension, bought a 12.7 percent stake in Gatwick for 106 million pounds in June, following the sale of undisclosed holdings to the Abu Dhabi Investment Authority and Korea’s National Pension Service.

BAA sold Gatwick to Global Infrastructure Partners under pressure from U.K. antitrust regulators in order to reduce the Ferrovial SA unit’s dominance of the U.K. market.

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