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Strong growth in first half profits for Stansted Airport owner MAG

PUBLISHED: 10:36 07 December 2017

Charlie Cornish, chief executive of MAG, owner of Stansted Airport.

Charlie Cornish, chief executive of MAG, owner of Stansted Airport.

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Stansted Airport owner MAG has reported strong growth in first-half turnover and earnings after a record-breaking summer.

The main terminal at Stansted Airport.
Picture: Stansted Airport The main terminal at Stansted Airport. Picture: Stansted Airport

Group-wide revenues for the six months to September 30 grew by 12.9% compared with the same period a year earlier to £544.6m while earnings before interest, tax and depreciation, excluding one-off gains and losses, were 9.6% higher at £236.6m. Earnings at Stansted were 11.8% higher.

Aviation revenue across the group was 15.2% up on last year’s first half while non-aviation revenues were boosted by a 13.4% increase in retail, following investment across the group’s airports in food and beverage, retail and car-parking facilities.

MAG (Manchester Airports Group) said passenger numbers at Stansted grew by 9.8% compared with last year’s first half to 14.6m, boosted by continued growth from Ryanair and the launch of a new base at the airport by Jet2.com together with a number of other new carriers and additional routes for established operators.

Manchester Airport also saw record passenger numbers, with the first half total climbing by 9.2% to 16.6m. The group-wide passenger total, also including East Midlands and Bournemouth airports, was 9.1% higher at 34.9.

An artist's impression of the new arrivals building planned at Stansted Airport, with the existing terminal to the left. An artist's impression of the new arrivals building planned at Stansted Airport, with the existing terminal to the left.

Earlier this week, MAG announced the sale of Bournemouth airport to Regional & City Airports, part of the Rigby Group, which already owns Norwich, Exeter and Coventry airports along with contracts to operate Blackpool, Solent and City of Derry airports.

The value of the Bournemouth deal was not disclosed but MAG said that the funds generated from the sale would be used to fund investments at its other UK airports, including major projects at Manchester and Stansted.

In April, MAG secured planning permission for a new arrivals building at Stansted, part of a £500m programme under which the existing terminal building will be reconfigured as a departures-only facility with additional security lanes, seating and retail facilities.

There was no further update in the results statement on MAG’s bid to seek an increase in the cap on annual passenger numbers at Stansted from the current limit of 35m to 43m in order to make fuller use of its existing runway capacity.

Passenger numbers at Stansted have been boosted by the arrival new new operators including Jet2.com.

Picture: Tony Pick Passenger numbers at Stansted have been boosted by the arrival new new operators including Jet2.com. Picture: Tony Pick

MAG has lowered its growth target from the 44.5m originally proposed, stating that the 43m figure can be achieved without increasing either the number of aircraft movements or the size of the airport’s approved noise “footprint” already authorised under the current capping arrangements.

However, the Stop Stansted Expansion group is opposing the application and has challenged MAG’s assumptions on the overall level of passenger growth likely in the coming years, quoting lower forecasts from the Department of Transport.

Cargo volumes across the MAG group during the first half were up 4.4% at 365,565 tonnes, with growth driven by increased traffic from e-commerce and new routes from Stansted with CargologicAir, Saudia and Silk Way West to North America, Middle East and Azerbaijan respectively.

MAG chief executive Charlie Cornish 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.”

He added: “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.”

Mr Cornish also sounded a positive note in face of uncertainty for the aviation industry as a result of the UK’s vote for Brexit.

“As we leave the EU, it will be more important than ever for the UK to develop the best possible connections to global markets,” he said. “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.”

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