Record breaking passenger numbers at Manchester Airport and a record-breaking summer season have increased revenue at MAG – Manchester Airport Group – by nearly 13%.
MAG is owned by Manchester City Council and the 10 local authorities of Greater Manchester and Stockport Council is set to receive a £3.6 million share of the Interim Dividend for the half year to September 2017 of £55.3m, a 17.7% year-on-year increase.
65% of this dividend will be paid directly to shareholders at Manchester City Council and the other Greater Manchester councils.
Manchester Airport is seeing record numbers of passengers through its doors and during the six months to September saw more passenger growth than any other UK airport (+9.2% to 16.6m). It has also now begun its £1bn transformation programme, the largest ever private investment in the North West.
Continued strong growth in adjusted EBITDA – earnings before interest, tax, depreciation and amortisation and gains and losses on sales and valuation of investment properties, and significant items – (+9.6% to £236.6m) driven by a record-breaking summer season saw revenue increase by 12.9% to £544.6m.
An increase in both long-haul and short haul destinations, as well as higher frequencies to existing destinations ensured MAG passenger numbers increased by 9.1% year-on-year to 34.9m.
Charlie Cornish, MAG CEO, said:
“Our latest results demonstrate that MAG is a strong and resilient business that is confident in its future growth prospects, and one that through the significant investment it is making is demonstrating its commitment to meeting long term customer needs.
“Across the Group, our commercial approach to engaging with airlines has enabled us to build extensive route networks that are proving very popular with passengers. This aviation growth, combined with our ongoing focus on passenger experience and non-aviation revenues, has resulted in us being able to deliver the 13th consecutive half-year of adjusted EBITDA growth.
“As we grow we are committing considerable investment to enhancing the look, feel and operation of our airports. In addition, the transformational projects at both Manchester and Stansted will deliver the larger terminal facilities needed for us to make better use of our spare runway capacity.
“We are proud of the economic benefits that our airports generate for their local regions and the contribution they make to UK PLC. As the UK gets closer to leaving the EU, we urge Government to do everything it can to secure the seamless connectivity to global markets that people enjoy today. As MAG continues to grow we will work with Government to ensure the policy framework is in place to support our continued success.
“In July, we welcomed the Government’s statement that it supports making best use of existing capacity at all airports around the country. It is now for the Government to use its Aviation Strategy to set out an ambitious plan to make better use of existing runway capacity and improve the UK’s international connectivity. Improving road and rail access to airports is a critical part of this.
“As we leave the EU, it will be more important than ever for the UK to develop the best possible connections to global markets. MAG expects demand for air travel to and from the UK to remain buoyant and to continue growing. As MAG continues to grow we will work with government to ensure the policy framework is in place to support our continued success.”
London Stansted Airport has seen passenger numbers in the first half of the year climb 9.8% year-on-year to 14.6m, with continued growth from Ryanair, Jet2.com establishing a new base at the airport, and a host of new carriers and routes to complement the already extensive European offering.
In April, MAG secured planning permission for a new arrivals building at London Stansted, which will form the centrepiece of a £500m enhancement programme and create the ability for the existing terminal building to be developed as a departures-only facility with additional security lanes, seating and retail facilities.
At East Midlands Airport, forecasts suggest that it will be a record breaking year for MAG’s cargo operation. 3.2m passengers flew to and from popular holiday destinations between April and September, a 3.2% year-on-year increase. During the same period 202,453 tonnes of cargo passed through the airport (+3.5%)
Increased revenues have been driven by both aviation and non-aviation income. On the aviation side, additional capacity and higher load factors have led to 15.2% revenue growth. Meanwhile non-aviation revenues were boosted by retail growth at 13.4%, following investment across the airports in food and beverage, retail and car-parking facilities.
In the last year, activity at MAG’s airports across the UK, at Manchester, London Stansted, East Midlands and Bournemouth contributed £7.1bn of economic value for UK PLC and for the communities in which our airports operate – a 14.5% increase on the previous year.
MAG has launched its own technology and e-commerce business to respond to changes in the way passengers travel using modern technology and to move the airport experience into a new digital era. MAG-O sits ‘arms-length’ from the rest of the Group and is aiming to improve passengers’ ‘end-to-end’ experience of using the Group’s airports through the introduction of better technology and innovative online products.
MAG this week completed the sale of Bournemouth Airport to RCA, part of the Rigby Group. The funds generated from this sale will be used to fund MAG’s investments in its other UK airports.
Following Monarch Airlines entering administration in October, Manchester Airport has seen significant interest from airlines for the slots it vacated, with new flights operating in slots vacated by Monarch already on sale with Jet2.com, Thomas Cook and TUI, and more expected to be announced in the coming weeks.
MAG Cargo tonnage is in a sustained period of growth, with volumes up 4.4% year on year to 365,565 tonnes. This growth has been driven by increased e-commerce traffic and new routes from London Stansted with CargologicAir, Saudia and Silk Way West to North America, Middle East and Azerbaijan respectively and from East Midlands to Leipzig, Milan and Madrid.
Major deals completed by MAG Property in the year to September include the sale of 45 acres of prime development land at Airport City Manchester to Icon Industrial, which is a development that could create 5,000 new jobs and 1m sq ft of logistics space. Meanwhile Hampton by Hilton opened its largest ever property at London Stansted Airport, and new cargo and office lettings deals at East Midlands and Manchester.