London City Airport owners have invested £130 million in new equity to gain a reprieve for lenders amid a long-term slump in business travel.
In April, a trio of Canadian pension funds – AIMCo and OMERS, as well as Ontario Teachers’ Pension Plan and Wren House, Kuwait’s Infrastructure arm – pumped in new capital to reduce debt, pay off interest, and boost cash reserves. A syndicate of lenders, including Lloyds Banking Group (LBG) and NatWest, agreed to ease the airport’s leverage clause — a ratio between debt and earnings that must be kept below in order to not breach its loan agreements.
London City is preparing to refinance over £700million of loans due for repayment from March 2026.
East London Airport’s recovery after the Covid pandemic has been slower due to its historic reliance on corporate travellers. The airport welcomed 3.4 millions passengers in 2023 compared to 5.1 million before the pandemic. The bosses expect it to reach 4 million passengers this year, still 20% lower than the number before the Covid crisis.
Heathrow welcomed 79.2 millions passengers in 2018, compared to a record 80.9 in 2019. This summer, Heathrow broke all passenger records.
London City also suffered a setback when the government decided to stop expanding services on weekends in August. Although the annual passenger limit was increased from 6.5 to 9 millions, it is believed that reaching this level without London City’s permission to expand its weekend services will be difficult.
London City in the Royal Docks has a history that dates back to 1981. It was transformed by Irish property tycoon Dermot Demond in the late 90s. He sold the airport in late 1990s to a group including infrastructure investor Global Infrastructure Partners.
GIP, the former majority shareholder in Gatwick Airport, sold the company to the Canadian-led group in 2016, for a total of £2 billion.
London City Airport spokesman: “Since pandemic, passenger growth has been year on year, with leisure travel representing now closer to 60% of passengers through our airport. London City Airport is a successful company with long-term, supportive shareholders.
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