Amid reduced business travel, London City Airport receives £130m to ease debt pressures.
- Canadian pension funds and Kuwait’s Wren House contribute to financial support, strengthening cash reserves.
- The airport struggles with lower passenger numbers compared to pre-Covid-19 levels.
- Government restrictions hamper efforts to increase weekend flight services despite higher passenger caps.
- This funding is a strategic move to support refinancing of loans due in March 2026.
Amid declining business travel, London City Airport has secured a £130 million cash injection aimed at alleviating debt pressures. This financial boost comes as the airport strives to recover passenger numbers that still lag behind pre-Covid-19 figures. The capital injection is sourced from a consortium of Canadian pension funds: AIMCo, OMERS, and Ontario Teachers’ Pension Plan, alongside Kuwait’s Wren House. The primary goal of this funding is to reduce debt, cover interest payments, and enhance cash reserves, providing the airport with critical breathing space as it approaches refinancing discussions for over £700 million of loans due in March 2026.
The airport’s recovery journey contrasts with larger hubs such as Heathrow. In 2023, London City Airport managed to accommodate 3.4 million passengers, a significant decrease from 5.1 million in 2019. Although there is an anticipated increase to 4 million passengers in 2024, it remains approximately 20% below the levels seen before the pandemic. This shortfall is largely attributed to the airport’s dependency on corporate travel, an area still on the mend.
The airport’s plans to boost passenger numbers have encountered government-imposed challenges. Attempts to expand weekend services were blocked, limiting the efficiency of the increased annual passenger cap from 6.5 million to 9 million. Reaching this heightened cap remains a complex target without the provision of additional weekend flights, further complicating recovery efforts.
A spokesperson for London City Airport remarked on the shifting passenger base, noting that leisure travel now constitutes about 60% of its clientele. The spokesperson affirmed, “Since the pandemic, we have seen year-on-year passenger growth, with leisure travel now representing closer to 60% of the passengers through our airport. London City is a profitable company with supportive, long-term shareholders.“
This financial strategy continues a history of significant ownership changes, including a previous sale by Irish property tycoon Dermot Desmond and a subsequent £2 billion acquisition by a Canadian-led consortium in 2016. The airport’s ability to navigate financial obstacles signals resilience amid ongoing global travel industry adjustments.
The £130 million funding signifies a crucial step for London City Airport in navigating post-pandemic recovery and refinancing challenges.
