Manchester Airports Group (MAG) said on Thursday it lost more than £1 million per day in the year ending March 31, 2021, as passenger numbers collapsed by 89% to 6.3 million during the pandemic.
MAG said it lost £374 million over the year – compared to a profit of £165.4 million in the prior year — as revenue fell 79.5% to £184.7 million.
MAG operates Manchester, London Stansted and East Midlands airports and is privately managed on behalf of its shareholders — Australian investment fund IFM Investors (35.5%), Manchester City Council (35.5%) and nine other Greater Manchester councils (29%).
MAG, the UK’s largest airport group, said it will be joined by five airlines in preparing to face the UK Government in court on Friday over “calls for transparency on its decision-making process for international travel.”
One positive note for MAG was cargo operations rising 19% and 31% respectively at East Midlands and London Stansted Airport for the financial year.
“MAG kept its airports open throughout the pandemic to support essential travel and freight movements, including critical medical supplies such as protective equipment and pharmaceutical supplies,” said the company.
“Maintaining high fixed-cost airport operations with such significant reductions in passenger-related income has meant that MAG recorded an overall loss of £374m for 2020/21.
“Increases in online shopping and the reduction in bellyhold freight capacity across the UK helped drive the group’s cargo operations at East Midlands and London Stansted Airport throughout the pandemic, with cargo volumes increasing 19% and 31% respectively.
“MAG acted quickly to secure its financial position in the early months of the pandemic.
“Alongside programmes that reduced operating costs by more than £183.4m, it strengthened its cash position with £300m of additional equity funding from its shareholders and £400m from the sale of the non-essential assets in the group’s property portfolio.
“While MAG has made use of the Coronavirus Job Retention Scheme, this only covered a small proportion of the group’s total costs.
“The results come as MAG prepares to face the Government in court tomorrow to challenge the lack of transparency around how Ministers are making decisions about the traffic light system for international travel.
“The proceedings are led by MAG, with airlines Ryanair, IAG, Virgin Atlantic, TUI and easyJet all supporting as interested parties.
“The UK’s largest group of airports will make its case to the court that the Government needs to set out how it categorises countries between the green, amber and red lists.
“Without sight or understanding of this decision-making process, the aviation sector – already the worst hit part of the UK economy as a result of the pandemic – is unable to plan its recovery, as countries are added and removed from the safe travel list with no obvious logic, forewarning or consultation with the industry, they argue.”
MAG CEO Charlie Cornish said: “These annual results paint a very different picture to previous years, reflecting the true impact of what has been the most difficult 12 months in our history.
“We saw international travel come to a near standstill with passenger numbers collapsing to less than 10% of normal levels, and we have had to take a series of decisive, and often difficult actions to protect the future of our business.
“As we look ahead, I am confident of the strong recovery our business and our sector can make, as well as the critical role our airports will play in ensuring a full recovery of the UK economy.
“Even in the last few weeks, we have taken tentative steps forward with some important markets now on the Government’s green list.
“However, our recovery has so far been stifled by the Government’s traffic light restrictions on international travel, which are significantly more onerous than other countries.
“After more than a year of disruption, consumers deserve more clarity so they can book with confidence.
“And as an industry, we need to understand how the Government’s traffic light system works so that we can make the right decisions for the future.
“The Government has been unwilling to provide that transparency and that is why we have been forced into bringing a legal challenge to secure more information, along with five key industry partners.
“We know there is demand for international travel, and we know that it can happen safely.
“We will continue working to ensure that our world-leading aviation industry, which supports more than 1m jobs and generates billions in economic value each year, can return to full strength and thrive once again, as soon as possible.”