MAG Annual Report/Results

[Humberside]

The MAG annual report for the year up to 31st March is now out

Operating profit down 19%
After-tax loss due to falling property prices an an exceptional tax charge

www.manchestereveningnews.co.uk/news/business/s/1125680_mag_profits_nosedive

The annual report - www.manchesterairport.co.uk/manweb.nsf/alldocs/6B5F66FA480F1C85802575F20037D2D1/$File/Annual+Report200809.pdf

Moving onto HUY specifics (Page 11 of the report)
Aviation income per passenger £12.20 per passenger, up from £8.60
Commercial income excluding property £8.40 per passenger, up from £7
However operating costs per passenger also up at £17.60 as opposed to £14.90 year before
However if my maths is right the increase in income is more than the increase in costs so good news there

Here what is said about HUY:

Humberside Airport experienced a reduction in passenger numbers of 7.7% in the year, due to the collapse of Spanish carriers Futura and LTE and the withdrawal of Spanair and Air Europa from the charter market.

During the year MAG undertook a review of its majority shareholding in Humberside Airport due to the relative size and strategic fit of Humberside with the portfolio. However, a number of factors including winning new North Sea business and securing other developments on site at Humberside, resulted in the decision being taken to retain the airport within the MAG
portfolio.

A state of the art cargo hub has been built and a unique simulator has been installed by Eastern Airways. Discussions are underway about further developments on site.

Blaming Spanish charter airlines for passenger number declines is wrong IMO. Costs have certainly increased for Spanish charter flights with less airlines in the market, but if routes are that successful they will still operate. Also Air Europa are still in the charter market (not sure about Spanair)

Page 17 shows revenue down 2.3% at £8.6 million (doesn't tally with the earlier figures so maybe this includes revenues not from day to day activities?)

EBITDA (Earnings before Interest, Tax, Depreciation and Impairement) down 42.9% at £0.8 million. Profit before exceptional items down 85.7% at £0.1 million. So we are still profitable on a day to day basis, just

Page 54 has some more figures
Assets valued at £21.8 million (down £1.4 million)
Liabilities valued £14.0 million (up £600,000)
(That gives a current ratio of 1.5:1, down from 1.7:1)
Capital Expenditure £400,000 (down £100,000)
Depreciation £600,000 (down £100,000)

[pug]

Blaming Spanish charter airlines for passenger number declines is wrong IMO

That is the reason, its just way too expensive to continue those flights unfortunately. I expect that the airport are working hard at getting some sort of investment from a UK based airline for future seasonal charters. The weak pound against the euro is the single factor in the chopping of routes, the inability to get the likes of TCX on board is a close second.

As an aside, the TCX crews part based last winter were holed up in the Holiday Inn in Hull, costs are way too much especialy in this climate when airlines are having to consolidate.

All in all though, the results are looking favourable particularly when compared to other airports. MAG seem to have done a good job of consolidating operations at HUY and it seems to have escaped the debts that other airports have gained through unsustainable expansion in leaner times. Perhaps a big 'up yours' to the doom mongers, or am i speaking too soon?

[Humberside]

Jul 14, 2009 17:36:41 GMT pug said:

Blaming Spanish charter airlines for passenger number declines is wrong IMO

That is the reason

Doesnt explain the reduction in Dalaman or Bourgas though. And Thomas Cook for example are still using AEA at other UK airports this summer

All in all though, the results are looking favourable particularly when compared to other airports. MAG seem to have done a good job of consolidating operations at HUY and it seems to have escaped the debts that other airports have gained through unsustainable expansion in leaner times. Perhaps a big 'up yours' to the doom mongers, or am i speaking too soon?

I think you maybe. Revenue is going to decline this year, and there are many fixed costs that cannot be cut back accordingly without compromising the airports ability to cope with increased passengers long term. With only a £100,000 'margin of safety' I forsee a small loss for the 2009/10 financial year

[pug]

In comparison to HUY, how frequent are the other AEA flights at the other airports? I have been told by more than one knowledgable person that the seat costs from the weak pound would push some services upto an extra £100 per pax, that is not viable. Dalaman and Bourgas may have had cuts, as to be expected, but it doesnt explain such drastic cuts to the Spanish destinations.

There are suggestions TCX had been offered a very good deal to stay at HUY but they still pulled out. This would suggest management may be prepared to offer these good deals to other airlines, which would in turn bump up the revenue from the car parks etc...

Things will take time, one consolation is that, for now at least, staff at HUY appear to be safe and feel they are capable of riding out the storm untill the upturn.

I would be very surprised if the lost routes are not regained in the next couple of years, with perhaps more expansion than before.

[Humberside]

Jul 15, 2009 17:36:15 GMT pug said:

In comparison to HUY, how frequent are the other AEA flights at the other airports?

Far less than they used too. Weekly LBA-ACE/TFS are two flights they are still operating

Jul 15, 2009 17:36:15 GMT pug said:

There are suggestions TCX had been offered a very good deal to stay at HUY but they still pulled out. This would suggest management may be prepared to offer these good deals to other airlines, which would in turn bump up the revenue from the car parks etc...

A bit of a u turn to start offering airlines very good deals (yes there was FR but I suspect that was MAG more than HUY). Up untill now HUY has been more conservative, and financially has performed better than some other loss making airports which have attracted lots of new service (though each airport obviously has unique circumstances). Short term at least, being conservative has worked. So how wise is it changing policy, especially when profit has just slumped

[pug]

Im not sure what sort of offers have been agreed in the past, looking on the airport website you can find the charges in PDF format, though how they realy charge could be anyones guess.

One major form of revenue is the car parks, apparantly they are the single biggest revenue earner for the airport. Perhaps when charters were more stable it made sense to continue down that route. Now that charters have gone, revenue has slumped (how many pax actualy park at the airport and spend time in the terminal for KLM and Eastern flights? not many i suspect) and they may have to change their sights to look at offsetting their loss in revenue via offering better charges to the lo-co's.

XL only paid half during their season at HUY, as did FR, Jet2 were turned down on their offer of paying half... They obviously believed there was a market at HUY, i dont think much has changed except for this temporary lull due to the recession..