UK. Retail and car parking turned in strong performances for Manchester Airports Group (MAG) for the six months ended 30 September 2013. The results include last year’s acquisition Stansted Airport for the first time. MAG is the largest UK-owned airport operator.
Excluding Stansted, retail division revenues rose +3.4% to £45 million (US$73.9 million) year-on-year, driven by new shopping and catering options at Manchester and East Midlands airports.
Car parking revenue increased sharply by +13.9% to £40.2 million ($US66.1 million), following heavy investment across all airports. Income per passenger for retail concessions, however, was down -2.1% to £2.85 while aviation and car parking were up +8.5% and +7.2% respectively (see charts).
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MAG Retail Director Beth Brewster told The Moodie Report: “We’re pleased that the retail division was up +3.4% against a difficult economic backdrop. We enter 2014 with a focus on the terminal redevelopments at the airports of London Stansted and East Midlands.”
MAG and its retail partners have invested £80 million (US$131.5 million) in Stansted and £12 million (US$19.7 million) in East Midlands retail schemes. The Group is investing £40 million in a major overhaul of Stansted’s main terminal, supported by a further £40 million (US$65.8 million) that will be invested by commercial partners.
“Both projects involve major changes to the terminals but our investments in Manchester and Bournemouth in 2009 and 2010 ensured strong growth in our retail business and we will be looking to replicate that effect at our other airports over the next year,” said Brewster, adding that changes to the one-bag rule at Stansted will also have a positive effect on retail.
The overall aim of the Stansted project is to create a more “customer-focused” terminal to deliver a more “intuitive and rewarding” journey for passengers, according to MAG.
The refurbishment includes an improved security area plus a bigger retail area offering enhanced food & beverage and fashion outlets.
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Stansted Airport will benefit from heavy investment, focusing on retail and food & beverage |
The East Midlands project includes an upgraded security area, a reconfigured terminal layout and improved retail space. Last summer East Midlands Airport also invested £3 million (US$4.9 million) in its on-site parking operation with the addition of 1,400 spaces and new car parking services.
Groupwide, cash investment in property, plant and equipment was reported at £42.3 million (US$69.5 million). MAG said it is advancing plans for the £800 million (US$1.3 billion) Airport City development at Manchester, which was announced last October.
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The acquisition of Stansted from Heathrow Airport Holdings one year ago added 10.1 million passengers, £138.4 million (US$227.5 million) in revenue and £59.3 million (US$ 97.5 million) in EBITDA during the period.
Overall, EBITDA, excluding Stansted, increased by +16.7% to £109 million (US$179.2 million). Operating profit rose +26.2% to £76.7 million (US$124.9 million). Nearly 26 million people flew to 266 destinations from MAG airports – Manchester, London Stansted , East Midlands and Bournemouth (see chart above).
MAG said it expects passenger growth to continue at Stansted as the result of two recent major long-term agreements with discount carriers. For Ryanair, MAG said, passenger numbers will increase from 13 million to nearly 21 million by 2023. The airport has also struck a deal with easyJet, which is projected to double passenger numbers from three million to six million annually by 2017-18.
MAG Chief Financial Officer Neil Thompson said: “MAG continues to outperform the UK market in terms of growing our passenger numbers. Through the endeavours of our teams, we have secured long-term agreements with leading airlines and retailers, creating a strong future for our Group.
“With a number of significant projects underway at present, the next six months will be as exciting and rewarding as the last and the strong earnings growth trajectory we have delivered to date will continue.”
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Manchester Airport is the busiest of MAG’s four airports with some 20 million passengers during the summer months alone |
Manchester was the busiest airport, hitting its 20 million target during the summer months. Increased traffic was attributed to increasing business across all airline segments fuelled by growth in the low cost and long-haul sectors. Manchester’s geographic position as the “˜Northern Gateway’ to global destinations and an alternative to using Southeast airports were also key factors, MAG said.
For December alone, Manchester Airport handled 1.3 million passengers, a +5.4% increase over the previous year and the 19th consecutive month of year-on-year growth. Passenger traffic was bolstered by an additional 153,000 extra seats on popular destinations compared with the previous winter season (see chart).
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Click on the above to view the enlarged image (then hover over graphs with your cursor and click for full detail) |
East Midlands Airport returned to pre-recession passenger numbers for the period. Bournemouth Airport’s performance remained steady with a focus on boosting the route network. For example, it utilised its position as an attractive base for low-cost operators, such as Ryanair, which has launched an enhanced new winter schedule.
