Banks have granted Vinci Airports subsidiary London Gatwick Airport (LGW) a temporary reprieve over its debt situation, after being hit by the Covid-19 pandemic.

Last month, the airport entered discussions with its lenders to obtain a temporary waiver of financial covenants in connection with $3.86bn (£2.8bn) of reference net debt and to revise certain terms of those covenants.

Due to exceptional conditions distressing air travel, a large majority of lenders accepted the request of the airport.

Now, the airport will not be required to fulfil the Senior ICR (interest cover ratio) and Senior RAR (debt ratio) at the upcoming two testing points, at end-December 2021 and end-June 2022.

For adjusting the exceptional impact of the pandemic on the airport’s EBITDA, the method for calculating the debt ratio will also be changed until June 2024.

Gatwick Airport Limited deputy chief financial officer Lorenzo Rebel said: “Gatwick’s financial response to Covid-19 has been strongly endorsed by its banks and bondholders, with over 92.5% of creditors in favour of Gatwick’s proposal to deal proactively with the forecasted effect on its financial ratios.

“This included agreement from Gatwick’s largest bondholders through a special committee of the Investment Association as well as full support across Gatwick’s bank group.

“This support, together with Gatwick’s prudent financial policy, decisive management actions in response to Covid and long-term shareholder support, has positioned Gatwick with the liquidity and financial flexibility to implement its recovery plans.”

Additionally, Gatwick commenced its 12-week public consultation on plans to bring its current Northern Runway into routine use alongside its Main Runway.

As per the proposed plans, the airport’s Northern Runway will be repositioned by 12m towards the north.

This development will enable dual runway operations with the airport’s Main Runway while fulfilling all international safety standards.

This proposal is expected to generate nearly 18,400 supplementary jobs by 2038 and an additional projected $2.06bn (£1.5bn) gross value added to the region.

The Northern Runway is expected to commence operations by summer 2029.