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London City Airport Secures £130m Lifeline Amid Business Travel Decline

October 13, 2024

London City Airport’s owners have injected £130 million in new equity to stabilise the airport’s finances amid a prolonged downturn in business travel.

The move comes as the airport struggles to recover from the pandemic, with passenger numbers still trailing pre-Covid levels.

The fresh capital has been provided by a consortium of Canadian pension funds — AIMCo, OMERS, and Ontario Teachers’ Pension Plan — and Kuwait’s Wren House. The funds are being used to cut debt, pay interest, and strengthen cash reserves, giving the airport breathing space as it prepares for refinancing talks on over £700 million of loans due in March 2026.

London City, which relies heavily on corporate travel, has lagged behind larger airports like Heathrow in its recovery. In 2023, London City welcomed 3.4 million passengers, down from 5.1 million in 2019. Despite an expected rise to 4 million passengers in 2024, this is still 20% below pre-pandemic levels.

The airport’s efforts to increase passenger numbers were also hampered by the government’s decision to block the expansion of weekend services, despite raising the annual passenger cap from 6.5 million to 9 million. Reaching this new limit is expected to be challenging without additional weekend flights.

A London City spokesperson said: “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 injection of funds marks another chapter in the airport’s ownership, which has included a sale by Irish property tycoon Dermot Desmond and a subsequent £2 billion acquisition by a Canadian-led consortium in 2016.