Latest Manchester Airport Group results show recovery under way

Charlie Cornish

The aviation sector’s ongoing recovery from the pandemic is illustrated in annual results released today by Manchester Airport Group (MAG) for the year to March 31.

The results show the group – which owns and operates Manchester, London Stansted and East Midlands Airports – served 20.5m passengers in 2021/22, up 225% year-on-year.

Despite a marked increase compared with 2020/21, the fact travel restrictions were in place for 11 months of the period meant passenger volumes were still only equivalent to 33% of pre-COVID 2019/20 levels.

With passenger numbers for the year remaining significantly lower than before the pandemic, and fixed costs for airport operations remaining high, MAG recorded an overall loss for 2021/22 of £320m, compared with an overall loss of £435.2m the previous year.

MAG’s combined losses for the past two years stand at £694m, with revenues down by 80% in 2020/21 and 48% in 2021/22 compared with 2018/19.

Compared with last year, revenue and results from operations in 2021/22 were up 159% and 64%, respectively.

Revenue was £462.1m, while results from operations was a deficit of £130.3m. Those figures compare with revenues of £893.4m in 2020, ahead of the pandemic, and results from operations of £182.7m

MAG is preparing for the aviation industry’s busiest period, as the peak summer season approaches. The group expects passenger volumes over these months to increase to levels close to those seen in 2019, leading to a fuller recovery over the course of 2022/23.

In the past financial year, 9.1m passengers flew through Manchester Airport, which was a 225% increase on the prior period, but still only 32% of pre-COVID levels. Despite the decreased numbers, due to travel restrictions, the Northern hub has marked several key milestones during the last year.

These include the opening of its Terminal Two extension, which is the centrepiece of its £1bn transformation, plus the return and addition to key long haul routes and carriers, which connect the North to vital global destinations.

However, earlier this year, Manchester Airport managing director, Karen Smart, stepped down after weeks of disruption to passengers caused by significant delays in security, due to insufficient staff numbers.

MAG CEO, Charlie Cornish, said: “With travel restrictions in place for nearly all of the last 12 months, it was another uncertain and unpredictable year for MAG and the wider aviation industry.

“After tentative steps towards recovery last autumn, the emergence of the Omicron variant once again resulted in major barriers for people looking to travel internationally.

“MAG played an industry-leading role in highlighting the ineffectiveness of international travel testing, which helped pave the way for the removal of travel restrictions in spring this year.

“Free of those restrictions, we were confident that airlines and passengers would return quickly to our airports.

“The pace of that recovery has brought its own challenges, and recruitment has taken longer and been more difficult than we anticipated. We’ve now recruited more than 1,500 new staff across MAG since January so that we can give passengers the best possible experience this summer.

“I am pleased with the number of new colleagues who have chosen to join our airports since January, and I am sure they will all play an important role in our recovery over the coming months and years.

“With passenger levels across MAG growing quickly back towards what they were before the pandemic, I am confident in the strength of our business and the contribution our airports will once again make for their regions and the whole UK economy.”

The partial easing of testing requirements for fully vaccinated travellers last autumn saw MAG’s passenger numbers reach 58% of pre-pandemic levels in November 2021, in what the industry hoped was the beginning of a sustained recovery.

However, the emergence of the Omicron variant led to the reintroduction of extensive and costly testing requirements for all passengers, which caused MAG’s initial recovery to fall back by around 30% month-on-month in December.

The UK Government finally removed the remaining restrictions on international travel in early spring 2022, following independent research that MAG commissioned from Oxera and Edge Health which demonstrated the ineffectiveness of travel testing in limiting the spread of new variants.

MAG saw passenger numbers increase significantly in the final quarter of the year, from 37% of pre-pandemic levels in January to 70% by March, and 82% by May, with MAG’s recovery outstripping that of others in the UK.

The scale and pace of this recovery presented significant challenges to airports and airlines throughout the country, with operators across the sector facing staff shortages, and lengthy recruitment processes making it difficult to keep up with the demand for travel.

MAG said it has been working hard for several months to bring its operations back to full strength as passenger levels return to those seen before COVID-19.

Since January, more than 1,500 new colleagues have taken up roles across all three airports, alongside hundreds of new staff at airlines, ground handlers and retailers operating at the group’s airports.

As new recruits have joined MAG’s airports, waiting times at security have improved. For example, at Manchester Airport more than 92% of passengers in June waited less than 30 minutes to pass through security.

MAG said it continues to work closely and constructively with its airlines to help them deliver the schedules they intend to operate, working hard to avoid large scale cancellations.

The return of key global markets has played a significant role in driving the recovery of the sector.

At Manchester Airport, in particular, the resumption of services to the US in November 2021, helped to restore a series of direct long haul connections, with services to New York, Atlanta and Orlando returning, alongside routes to the Middle East, Africa, Asia and the Caribbean.

On sustainability, in October 2021, MAG announced the roll-out of a carbon offsetting tool in partnership with CarbonClick, alongside a long term partnership with Fulcrum BioEnergy UK which will make Manchester Airport the first in the UK to have a direct pipeline of Sustainable Aviation Fuel (SAF). MAG was also named a Financial Times European Climate Leader for the second year in a row in 2022.

MAG marked a number of other significant moments across the past year. In July 2021, it opened its Terminal 2 extension at Manchester Airport, as part of its £1bn transformation programme.

London Stansted Airport won its planning appeal against Uttlesford District Council in May 2021, increasing the airport’s maximum passenger numbers from 35 to 43 million per year and allowing it to continue to grow sustainably.

East Midlands Airport has continued in its work to establish its Freeport status, which is expected to create 60,000 jobs across the region.

As the group enters the new financial year, it also announced the launch of its new digital branch – CAVU. Formed from the union of MAGO and MAG US, CAVU will act as a travel services provider and digital agency for MAG and other aviation businesses to develop tech solutions to enhance their offering to passengers.

Cargo operations across MAG’s three airports performed well across the year, owing to businesses’ increased reliance on air freight and continued demand from consumers for e-commerce. Loads for the group in 2021/22 were up three per cent year-on-year, carrying a total of 791,000 tonnes.

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