Gatwick chief's pay tops £1m as Christmas Eve passengers fume
Huge debt repayments mean airport makes losses and pays no corporation tax
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Thursday 09 January 2014
The chief of Gatwick Airport, where thousands of passengers were left stranded over Christmas, earned pay and pensions of more than £1m last year while the company paid no tax at all.
Stewart Wingate, believed to be the "highest paid director" at Gatwick Airport Limited, scooped a pay and bonus of £1m plus pension contributions of £31,000 for the year to 31 March, accounts revealed last night. The previous year he received £950,000.
News of his huge pay at the loss-making airport was bound to anger passengers, for whom Mr Wingate admitted this week that a lot more "could and should" have been done following the power cut and flood that created chaos at the airport on Christmas Eve.
He admitted to MPs on the House of Commons Transport Committee this week that the actions of executives "fell short" and that Gatwick's reputation would be damaged. Company sources said the remuneration committee would decide in March whether he should give back some of this year's bonus.
Gatwick is owned by a consortium of foreign investment funds that consists of the New York-based Global Infrastructure Partners, the Abu Dhabi Investment Authority sovereign wealth fund, The California Public Employees' Retirement System, the National Pension Service of Korea and the Australian Future Fund. Its parent company is based in Guernsey.
The accounts for Gatwick Airport Limited show the company was funded by £1.4bn of debt, which cost it £142m in repayment costs last year. Operating profits for the year came in flat at £116.4m. However, as in the previous year, the company paid no tax as the interest repayments it had to make drove it into a loss.
Turnover, derived mainly from runway charges, airport shops and car parks was £538.9m against £517.4m a year earlier.
In a statement that will ring hollow to passengers affected by the Christmas chaos, the accounts declare the company's aim is to "deliver the best passenger experience by listening to its passengers and delivering the kind of service that will make them choose to fly from Gatwick."
But another goal was for the airport to be "maximising income, lowering its operating costs and driving capital efficiency".
Capital expenditure, funded by part of its huge debt pile, is planned to fall from £226m in 2012/13 to 209.7m 2013/2014.
From the select committee evidence it appeared that conditions endured by passengers over Christmas were due to poor decisions from managers rather than inadequate investment.
Flights due to depart from the north terminal after 1pm on Christmas Eve were moved to the south terminal – a decision Mr Wingate admitted was wrong.
Mr Wingate told MPs Gatwick would have to spend millions of pounds on contingency plans to make sure such an incident never recurs. It is offering retail vouchers of £100 for those whose flights were cancelled as a "goodwill gesture." Gatwick's finances are tightly regulated by the Civil Aviation Authority.
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