East Mids boss still interested in BAA airports
The owner of East Midlands Airport is still on the hunt to buy either Stansted, Glasgow or Edinburgh airport should BAA be forced to sell, its finance director has told Insider. Manchester Airports Group's (MAG) Ken Duncan said the group would "naturally be interested" in an acquisition but much depends on the outcome of the legal challenge by the Competition Commission (CC) in the Court of Appeal.
In March 2009 the CC found that BAA's seven UK airports constituted a monopoly and ruled that it should sell both Gatwick and Stansted, plus Glasgow or Edinburgh. BAA later sold Gatwick for £1.5bn but last December won an appeal to overturn the CC's decision to sell other airports in its portfolio. The Competition Appeal Tribunal found that there was an "apparent bias" in the CC verdict as one of its panel members, Professor Peter Moizer, had links to MAG.
However, the regulator last month appealed against that ruling and a decision on whether BAA sould be broken up is now expected later in the year.
Duncan said: "In terms of major acquisitions, much depends on BAA's willingness to sell and the Court of Appeal's decision. But if Stansted, Glasgow or Edinburgh were to come back on the block, we would naturally be interested.
"We've continued to invest in the business over the past year and we will continue to do so. In the last 12 months that investment has totalled £80m, including £17m to buy the JetParks business, proving that even in the downturn we've been quick to take advantage of opportunities that have presented themselves."
A consortium including MAG, Canada's Borealis Infrastructure and the Greater Manchester Pension Fund, was also in the running to buy Gatwick in 2009, but walked away from a deal after failing to agree a price.
Duncan was speaking to Insider as the group revealed that operating profits had fallen to £56.1m in the year to 31 March 2010, down from £68.8m previously. Revenues were also 6 per cent lower at £348.9m following a 12 per cent reduction in passenger numbers to 23.9m across its four airports - Manchester, East Midlands, Bournemouth and Humberside. However, Duncan said the performance was pleasing given the tough conditions in the aviation market.
"Losing 3.4m passengers costs you £37m in profit and we've had to take actions to try and offset that," he said. "Aviation yields have increased, retail yields have increased and the car parking yields have increased. We've also maintained very tight cost control. All of those have benefited to the tune of £15m proving that decisive management has lessened the impact of the falling passenger volume."
At East Midlands Airport, passenger numbers fell from 5.4 million to 4.5 million during the year, while revenue decreased from £58.3m to £49.7m. The airport said that EasyJet's decision to withdraw its services in January has now been offset by new routes from Jet2, Ryanair and Bmibaby.
