Manchester Airport Group’s commercial revenues rise strongly

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.
Charlie Cornish
CEO
Manchester Airports Group

UK. Manchester Airports Group (MAG), owner of Manchester, London Stansted, East Midlands and Bournemouth airports, turned in a strong non-aeronautical revenue performance for the half-year from 1 April to 30 September.

Retail revenue rose +6.7% to £83 million (ahead of passenger growth of +6% to £29.7 million) while car parking turned in a stellar showing, rising +10.1% to £79.6 million, almost as much as retail.

Car parking’s revenue growth had been driven by a focus on innovation, providing more customer choice and maximising utilisation, MAG said. Notably, yields increased year-on-year by +4.2% and there was strong growth in pre-booked income at Manchester and Stansted airports.

Commercial revenues were buoyed by what MAG described as its most successful summer ever. London Stansted Airport added more passengers year-on-year (1.2 million) than either Heathrow Airport (0.9 million) or Gatwick Airport (1 million), making it the fastest-growing major airport in the UK, the company claimed.

MAG said that passenger growth had driven retail revenue, with year-on-year retail yields “broadly stable”. Stansted saw a retail yield uplift from the completion of the terminal transformation project.

The final phase of that Stansted Transformation Project is on track for completion by end 2015. As reported, the phase 3 retail development of 15 new speciality retail units is already open and three more stores are scheduled to open this month.

Groupwide emphasis has been placed on creating additional commercial spaces and increasing “positive dwell time”.

Increased revenues were also driven by more passengers upgrading their airport experience with what MAG called “a little slice of luxury” and taking advantage of the Escape Lounges, Premium “˜Meet and Greet’ valet parking offers and fast track security clearance.

Manchester Airport experienced the busiest month in its 77-year history in August and continued this momentum into the autumn.

Aeronautical revenue grew by +3% to £227.9 million.

The group posted continued strong growth in EBITDA (+10.7% to £202.5 million) driven by record passenger numbers (+5.7% to £29.7 million) and new route development.

Internationally, the group said that the recently launched MAG USA is making good progress, with its first premium “˜Escape Lounge’ opening at Minneapolis-St Paul International Airport next week. MAG USA announced today that it has secured its second contract to build and operate an Escape Lounge in the USA, at Oakland Airport, California.

MAG CEO Charlie Cornish 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.”

MAG noted: “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.

MAG Property has agreed a number of significant deals across its airports, including the development of a new high-quality 357-bed hotel at London Stansted Airport in a £45 million development project.

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Source for all graphics: Manchester Airports Group
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