The boss of London City airport is “very optimistic” the travel industry will recover rapidly from the impact of the Omicron variant, while predicting a “step change” in demand for flying from this summer.
Chief executive Robert Sinclair told the Financial Times: “Two years into this pandemic, I think hopefully we are starting to see the end of it . . . the government’s messaging around living with Covid is hopefully resonating with people.”
He was reported to be banking on the revival of business travel to help the docklands airport recover after turning to lenders and shareholders to raise hundreds of millions of pounds to navigate disruption from the pandemic.
Corporate travel returned to 35% to 40% of normal levels In the autumn, when passenger numbers hit their highest levels of the crisis, he said.
London City has the highest proportion of business flights of all UK airports, a status Sinclair guards “jealously” because it attracts airlines looking to generate more money per passenger through higher fares.
Shareholders are also backing the airport through new funding with £200 million in loans and a £190 million private placement to help it survive the collapse in passenger numbers.
The “strong support” from shareholders and lenders underlined the long-term resilience of airports as attractive investments, said Sinclair.
“It has been very good for us to see the response from the financial markets, that I think do not see this as being an existential event,” he added.
Just 714,000 passengers used the airport last year, less than 15% of 2019 pre-pandemic levels and lower than the 905,000 travellers in 2020, when there was a normal start to the year.
Sinclair expects to return to close to pre-pandemic levels of flying at London City this year.
“We do think it will return to pre-pandemic levels, but it will take longer [than leisure travel],” he said.
The airport is maintaining a strategy to attract leisure passengers to complement corporate travel with British Airways launching four new routes this summer to Barcelona, Luxembourg, Milan and Thessaloniki.
Sinclair said: “It is a large market which we are increasingly tapping into. But equally, it doesn’t come at the detraction of our core market, the bread and butter for London City, which is business travel.”