Manchester Airport Group (MAG)

[News Guru]

[textarea]Manchester Airports Group interested in BAA airport disposals

Manchester Airports Group (MAG) has said it could be interesting in acquiring a UK airport, following the ruling this month that BAA should be forced to sell Stansted and either Glasgow or Edinburgh Airports. Speaking to Insider, group chief executive Charles Cornish - who took over the reins at MAG last October, said: ‘We will be interested; assuming they become available we’ll look at getting a vehicle together to buy one of them.’

Airports operator BAA is likely to be forced to sell two of its six UK airports after it lost a bid to appeal against a 2009 sale order by competition authorities. In March 2009, the Competition Commission found that BAA’s seven UK airports constituted a monopoly and ruled that it should sell Gatwick and Stansted, plus either Glasgow or Edinburgh. The company sold Gatwick for £1.5bn and mounted a string of legal challenges in an attempt to halt further break up of the group. But the Supreme Court has now ruled against its latest bid to stop further sell-offs.

A consortium including MAG, Canada’s Borealis Infrastructure and the Greater Manchester Pension Fund, was in the running to buy Gatwick in 2009, but walked away from a deal after failing to agree a price. Mr Cornish told the Insider: ‘The shareholders were prepared to back the company in buying Gatwick and that was a £1.5bn acquisition. They are very supportive of MAG, are interested in the value of the group and the dividends it creates.'

He added that overseas investors could also figure in any future deals. ‘You would almost certainly need an infrastructure fund to put in equity and create a 50-50 joint venture. If you look at a good infrastructure asset in the UK, then the sovereign wealth funds from Asia Pacific and the Middle East could also be interested. Abu Dhabi has a shareholding in Gatwick, so you would have to consider whether there would be any conflict of interest, but certainly the sovereign wealth funds could be opportunistic here.’

Source[/textarea]

 

[Aviador]

I never realised the Greater Manchester Pension Fund was involved in the consortium to purchase London Gatwick airport. I'm not so sure the good folk of Manchester that have their money in the pension fund pot will have been so keen. Clearly the purchase of any airport is a long term investment but the way the aviation industry is going at the moment I wouldn't describe it as a secure investment.

 

[News Guru]

[textarea]Manchester Airport wants more flights from regional hubs

Manchester Airports Group has called on the Government to help stem a flow of seven million passengers forced to travel out of the region and take flights from south east hubs, the MEN reports. The Department for Transport (DfT) is in the process of drawing-up its policy for the future of UK aviation and has invited key members of the sector to submit their views.

MAG, which controls Manchester, Humberside, East Midlands and Bournemouth airports, thinks more should be done to encourage airlines to operate from regional airports, saying the north west economy is currently missing out on tens of millions of pounds a year.

External affairs director Jonathan Bailey told the newspaper: ‘There are seven million passengers who travel from the Manchester area by road or rail to take flights from London airports. We want to know what will be done to make sure regional airports are able to pull their weight and what policy measures there will be to help them grow.'

‘We are keen to grow our airports and helping our regional economy, while at the same taking the pressure off the over-heated and congested south east. Aviation is such a key driver of economic activity and employment and makes all the other parts of the economy work. We need to explore ways that can be done and one is by introducing a a tax regime with regional variations.’

Source[/textarea]

 

[Aviador]

Manchester Airports Group has called on the Government to help stem a flow of seven million passengers forced to travel out of the region and take flights from south east hubs

I thought this was interesting given the amount of passengers Manchester airport steals from neighbouring regions. If West & South Yorkshire along with the Merseyside regions could regain lost passengers to Manchester airport the airport would be very much smaller than it is today.

I have no doubt that Manchester airport loses many passengers to the South East airports and I wonder if this will alter with the eventual loss of Heathrow & Gatwick links which seems inevitable. Could it lead to more direct international flights or will it just lead to more flights through hub airports such as Amsterdam?

 

[News Guru]

[textarea]MAG ‘no longer interested in buying a BAA airport’

Manchester Airports Group (MAG) has cooled its interest in buying Stansted, and / or one of either Glasgow or Edinburgh airports, the Manchester Evening News reports. The Competition Commission said today that BAA has to sell two airports, although the airports operator is likely to appeal the decision again.

MAG, which owns Manchester, East Midlands, Humberside and Bournemouth airports, had previously expressed an interest in buying one of the airports, should BAA be forced to sell. The newspaper reports that, 'while MAG is not completely ruling out making a move, it is understood to have cooled its interest substantially.' It is instead reported to be prioritising its £650m Airport City scheme and stimulating further growth at Manchester Airport, including attracting more low-cost routes to the north west.

Source[/textarea]

 

[pug]

I hope MAG release their 'Transformation 2011' document when its completed in August. Will be interesting to see their intentions (if any) for their other group airports, particularly BOH and HUY.

 

[Aviador]

I hope MAG release their 'Transformation 2011' document when its completed in August. Will be interesting to see their intentions (if any) for their other group airports, particularly BOH and HUY.

Do you know if Humberside and Bournemouth have even been involved in making the Transformation Document?

 

[pug]

A post (which I believe is an excerpt from an internal email from Charlie Cornish) had been posted on another forum. I didnt want to post the excerpt due to link issues, however it does highlight that it will outline where they believe potential growth and opportunities are for the Group... So I would assume that, if this is to be released in some form of document then it would consider its other airports too? They have already suggested they expect HUY passenger numbers to grow in the future, and that the ownership of Humberside is constantly under review.

 

[News Guru]

[textarea]MAG could buy a foreign airport if Stansted bid fails

Manchester Airports Group could buy a European or American airport if it fails to win an expected auction for Stansted, the MEN reports. The 10 Greater Manchester councils, which jointly own MAG, will be asked in the coming weeks to approve plans to seek external investment to fund a potential acquisition. Chief executive Charlie Cornish told the newspaper that talks are already under way with potential investors and he hopes to narrow down the list of serious contenders over the next couple of months.

Mr Cornish said he had ruled out a bid for Edinburgh Airport, which is currently being sold by BAA, but that he was looking at Stansted ‘in some detail,’ due to its similarity in size to Manchester and its potential for further growth. He is determined to sort out the way in which MAG could be refinanced to fund an acquisition now, so it can act quickly when Stansted comes to the market to avoid a repeat of the scenario that saw the group miss out on a swoop for Gatwick in 2009.

On the benefits of buying Stansted, he said: ‘If you look at all the London airports, they will all fill up over the next 10 to 20 years. Currently, Stansted is 61 per cent utilised, so there is still plenty of growth potential. It has about 18m passengers a year, so it has the potential to grow with the right commercial approach and with the relationships we can introduce through Manchester and East Midlands. Having another quality airport in the group, in terms of scale to Manchester, would bring a better balance to the group.’

Mr Cornish said Stansted was the only realistic UK-based airport the group would look at, meaning he would look overseas for other opportunities, adding any potential alternative airport purchase would be ‘in the west.’ He said: ‘If something else pops up, we will always have a look at it but it would always have to be of the right scale. In the UK, there is only Gatwick and Stansted but there are lots of other potential opportunities in other countries.’

For more information on this airport news story visit: http://menmedia.co.uk/manchesterevening ... y-stansted[/textarea]

 

[News Guru]

[textarea]Councils back MAG plans to buy another UK airport

Manchester Airport's council owners have backed plans to change the group's ownership structure in order for it to raise fund to buy another UK airport, the BBC reports. Manchester Airports Group (MAG), which also owns East Midlands, Bournemouth and Humberside, want to bring in partners to help finance the deal.

MAG has not said which airports it might bid for, but Stansted is likely to be put up for sale by BAA soon after a ruling by the competition regulator. The company has already said it will not bid for Edinburgh Airport, which is currently being sold by BAA. It did bid as part of a consortium for Gatwick, but was unsuccessful.

Local authorities currently own MAG, with Manchester City Council holding 55% of the group and the nine other Greater Manchester authorities holding 5% each. A joint statement by the authorities and the airport said: ‘Manchester Airports Group is aiming high to strengthen its position as one of the leading airport operators in the country. MAG is already a key driver of jobs and growth in the North of England, but these proposals would allow the group to strengthen this position - and deliver maximum value for the local authority shareholders.’

The councils now need to individually give the plans the green light in the coming weeks. During this period MAG will invite private equity investors - pensions and infrastructure investors - to submit proposals for a deal to buy in to the group. The process of choosing an investment partner is expected to take a few months. MAG said earlier this month that it could buy a foreign airport if it was not successful in buying Stansted.

For more information on this airport news story visit: http://www.bbc.co.uk/news/business-17050143[/textarea]

 

[News Guru]

[textarea]Manchester Airports Group to sell 50% stake to fund Stansted bid

Manchester Airports Group plans to raise about £1 billion by selling a 50 percent stake to fund a bid to buy Stansted Airport, the Sunday Times reports.

The group will choose a preferred bidder in the next month from Australia-based Industry Funds Management., Cheung Kong Holdings, and a joint venture between 3i Infrastructure and the Abu Dhabi Investment Authority, the newspaper adds. The sale will be conditional on MAG making a successful bid for Stansted.

For more information on this airport news story visit: http://www.bloomberg.com/news/2012-04-2 ... -says.html[/textarea]

 

[Aviador]

[textarea]Council approves airport moves

MOVES to add the “financial firepower” needed to fund major airport expansion plans have been given the go-ahead by Bolton Council .

The authority’s ruling cabinet approved proposals by Manchester Airport operator Manchester Airports Group (MAG) to join with investment firm Investment Funds Management (IFM) as part of moves to acquire Stansted Airport.

Bolton has a five per cent stake in MAG and, with the nine other Greater Manchester authorities, receives an annual dividend from its shares. Last year’s £1 million windfall helping to boost a range of community projects.

Full Story: http://www.thisislancashire.co.uk/news/ ... ort_moves/[/textarea]

 

[News Guru]

[textarea]Commercial helps drive annual growth at Manchester Airports Group

UK. Manchester Airports Group (MAG), the UK’s largest regional airport company, posted £393.1 million in group revenue for the year ended March 2013 (+5.3%), buoyed by improved yields on commercial income and by passenger growth.

Read more: http://www.moodiereport.com/document.ph ... c_id=36168[/textarea]

 

[Aviador]

Record Passenger Numbers Drive MAG Growth

MAG, the UK's leading airport group, today reports its interim unaudited half-year results, for the period 1st April 2015 - 30th September 2015.

• Continued strong growth in EBITDA (+10.7% to £202.5m) driven by record passenger numbers (+5.7% to 29.7m) and new route development. • MAG has experienced its most successful summer ever. London Stansted Airport added more passengers year-on-year (1.2m) than either Heathrow Airport (0.9m) or Gatwick Airport (1m), making it the fastest growing major airport in the UK. Manchester Airport experienced the busiest month in its 77 year history in August and continued this momentum into the autumn.

• The introduction of 31 new routes across the Group has helped to boost passenger numbers to record levels. The new routes include a host of exciting destinations across the globe, including new long haul routes announced from Manchester to Boston and Los Angeles and long haul flights started from Stansted to Las Vegas, Orlando and Cancun. New short haul routes from MAG airports include the Azores, Deauville, Castellon, Stuttgart and Porto. • Increased revenues have also been driven by more passengers upgrading their airport experience with a ‘little slice of luxury’ and taking advantage of MAG’s award-winning Escape Lounges, Premium ‘Meet and Greet’ valet parking offers and fast track security clearance.

• Cargo income has grown strongly, up 5.7% year-on-year, benefitting from the continued growth in internet shopping, new route launches and also businesses diverting freight operations away from the Channel Tunnel due to the ongoing disruption. Cargo revenue at East Midlands Airport is up 8.8%. • The recently launched MAG USA is making good progress, with its first premium ‘Escape Lounge’ opening at Minneapolis-St Paul International Airport next week. Today, MAG USA is pleased to announce that it has secured its second contract to build and operate an Escape Lounge in the USA, at Oakland Airport, California.

• MAG Property has agreed a number of significant deals across our airports; Mountpark Logistics has started construction of a 268,000 sq ft unit at Manchester Airport, to be completed by Q1 2016. In addition, a new high-quality 357 bed hotel is to be developed at London Stansted Airport in a £45 million development project, in a deal agreed with Urban & Civic. DHL has agreed an expansion of their UK logistics hub facility at East Midlands Airport, with a 244,000 sq ft cargo hub extension to their existing 450,000 sq ft facility.

• In 2015, MAG’s airports across the UK, at Manchester, London Stansted, East Midlands and Bournemouth, will contribute £5.6 billion in economic activity to UK PLC. This means that for every £1 the Group earned in revenue last year, economic activity worth another £7.58 will be generated in the wider economy as a result.

• Stansted is now handling 4.8 million more passengers than when MAG acquired the airport in early 2013, an increase of 27.4 per cent. The airport still has significant spare capacity and is well-placed to meet future growth in London's aviation demand, prior to any new runway being built.

• Group announces an Interim Dividend for the half year to September 2015 of £38.6m, a 25% year-on-year increase.

Charlie Cornish, MAG CEO, said:

“The first half of the year has seen sustained growth; outperforming our challenging targets in many areas with record numbers of passengers using our airports.

“Our Group operating model continues to deliver benefits and support our airports in competing to attract new passengers and airlines.

“This has been our busiest summer ever and as we approach the milestone of handling 50 million passengers a year, we are responding to changes in the way people want to travel by giving them the opportunity to upgrade their airport experience and begin their journeys in style. Our offerings in this area are driving strong growth in our retail revenues.

“Our Escape Lounges, in particular, have been a real hit with passengers in the UK, and we are now exporting the concept to the USA, with our first lounge opening in Minneapolis-St Paul next week, which we expect will be the first of many across North America.

“I was also delighted to welcome The President of China, His Excellency Xi Jinping, to Manchester Airport in October as part of his State Visit to the United Kingdom. The President and the Prime Minister unveiled a new direct link from Manchester to Beijing, starting in Summer 2016, which will give the 100,000 passengers travelling each year between the two cities the convenience of direct scheduled services. The new route demonstrates the key role that the airport plays as a Global Gateway from the North.

“MAG airports continue to be true growth engines for their regions, employing thousands of people and generating significant economic activity in the wider economy.

“They also continue to offer choice and competition for passengers, providing the direct services that passengers want to see from their local airport. A network of competing airports across the country provides the best solution for customers and also contributes hugely to the growth of UK PLC. At a time when other airports are running out of capacity, our airports provide a solution to the UK’s aviation needs both now and in the future.

“We have confidence in the Group's long term prospects and I look forward to a successful second half of the year.”

Business Review:

MAG has delivered sustained growth in the first six months of FY16, meeting or exceeding its financial targets and once more continuing double digit growth in EBITDA. Group EBITDA rose by 10.7% to £202.5 million, driven by record passenger numbers and successful new route development – with Manchester and Stansted in particular both handling increasing numbers of passengers.

A continued focus on cost control and measures to improve operating performance has again contributed to growth in EBITDA, backed up by continued investment in infrastructure with a focus on customer service. The Group has also been able to translate profits into cash, enabling the Group to grow successfully and sustainably through investment in infrastructure and development opportunities. Cash generated from operations increased by £5.8 million (+ 3.3%) to £180.2 million.

An Interim Dividend of £38.6 million will be paid in December 2015 for the half year to September 2015 which is as a result of the strong performance during the period and the Group’s confidence in trading during the rest of the financial year.

A record number of passengers are using Manchester Airport. August was the busiest month in the airport’s history and passenger numbers to September 2015 were 0.6 million (4.5%) up on the same period last year.

The increase has been driven by new long haul routes as well as incumbent short haul carriers adding capacity through additional services and larger aircraft. The ‘Manchester Airport Transformation Programme’ – a £1bn, 10-year plan – was unveiled and will deliver a significant phased upgrade of the facilities at the airport, ensuring that it continues to thrive as a national asset and play an even greater role as the ‘UK Global Gateway from the North’.

London Stansted Airport has also experienced impressive growth in passenger numbers – 1.2 million (10.6%) up year on year. During August, flights to and from Stansted were on average 93.5% full - a record load factor for the airport. Growth has been driven by the introduction of new destinations, coupled with increased frequency of flights on existing routes. Stansted served over two million passengers for five consecutive months to September, the first time this has been achieved since 2008.

East Midlands Airport has performed slightly ahead of expectations, with cargo income up 8.8% as an increasing volume of express freight traffic takes advantage of the airport’s freight facilities and central location. Passenger numbers in the period were down by 0.2 million (6.5%) year on year, driven by withdrawal of flights by Monarch. The airport has partially mitigated the impact of the withdrawal through improved load factors to other destinations.

Bournemouth Airport performance was in line with the previous year. Car parking has been an area of growth, as customers increasingly take advantage of advance booking offers and premium ‘Meet & Greet’ valet parking products. The Group’s status as one of the world’s biggest providers of valet parking has been consolidated by increased uptake of these products, driven by competitive pricing and more customers booking in advance.

Cargo income has benefitted from growth in e-commerce and internet shopping, with integrated express carriers expanding their operations and contributing to 8.8% growth in revenue at East Midlands, the biggest airport for dedicated cargo traffic in the UK. The cargo business also benefited from customers choosing to divert their freight operations away from the ongoing disruption being experienced at the Channel Tunnel.

In retail, revenue is up despite challenging conditions in duty free retail. The Terminal Transformation Programme at Stansted is now nearing completion, delivering a significantly improved retail and food & beverage offering to passengers. The completion of the East Midlands Airport terminal upgrade has also boosted retail performance.

In the MAG Property division, revenue has remained broadly consistent with the prior year, reflecting a strong portfolio of tenants in MAG’s offices, hotels and cargo properties. Airport City Manchester, in which MAG holds a 50% investment, continues to see strong levels of interest and is expected to deliver significant returns in the next few years.

Manchester Airport Group Press Release