Riding the storm
Kevin Feddy
TOUGH but controversial action to make Manchester Airport more efficient has helped it “weather the storm” created by world events, bosses said today.
The airport group, which operates East Midlands, Bournemouth and Humberside as well as Manchester, has faced the challenges of global terrorism, the war in Iraq, SARS and economic uncertainty in the past year.
Bosses implemented a restructuring programme at Manchester, which involved 140 redundancies and significant changes in terms and conditions affecting around 400 workers, some of whom suffered pay cuts of up to 40 per cent. The strategy reduced operating costs by £8.7m in the year to March 31.
But the group incurred exceptional costs of £14.3m, mostly in redundancy and compensation payments.
Today, the group announced operating profits for the year fell 3.1 per cent to £60m, but pre-tax profits after exceptionals were up 16 per cent, from £42.12m to £48.85m.
Turnover increased from £321.36m to £328.15m. The group is the second largest airports operator in the UK. Chief executive Geoff Muirhead, whose pay rise has provoked a chorus of protests, said two years of “rigorous rationalisation” had helped the group to weather the storm created by world events.
Manchester Airport saw a fall in passenger numbers last year, from 19 million to 18.6 million, and turnover dipped 1.7 per cent from £242m to £237.8m. But this was offset by increases at the group’s other gateways, boosted by the arrival of low-cost carriers.
Group passenger numbers rose 4.6 per cent to 23.2 million.
Developments at Manchester included new routes and airlines and additional frequencies on existing networks. It spent millions on upgrades to the passenger terminals.
The group’s chairman last year, Coun Bob Howarth, said the operator was well-positioned to deal with any further turbulence in the industry. But he warned: “Tough trading conditions can be expected to continue, as a result of which the group must continue to respond to any pressures in the same effective manner.”
The group is owned by Greater Manchester’s 10 authorities, sharing a dividend windfall of £5.5m. Manchester, owning 55 per cent, will receive the lion’s share.
04/11/2003