Annual Report and Accounts 2010-11 - Manchester Airport

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10 Business ReviewHumberside AirportTrading conditions have been particularly difficult in thelast twelve months; the Humberside region is still feelingthe effects of the recession with a subsequent reductionin the disposable income within the catchment area.However, Humberside continues its track record ofidentifying where it can expand its participation in nichemarkets which provide it with a significant number ofopportunities to grow income.Opportunities connected with the establishment of asignificant offshore wind farm manufacturing facility in theregion looked to have strengthened, Siemens being thelatest company to state their intentions to build a facilityon the North Humber Bank. Humberside Airport willcontinue to work with North Lincolnshire Council and thedevelopers, Able UK Limited, to ensure we are bestplaced to benefit from all developments.Offshore traffic continues to perform strongly with BristowHelicopters increasing its presence. The onsite hoteldedicated to the offshore workers is now open andsuccessfully operating with the developer looking toestablish a conventional full service hotel within the nextthree years.The KLM service continues to perform well and is one oftheir strongest UK stations.Following the highly successful Malaga Flybe operationlast year the Airport has secured a double-weekly Alicanteservice with Ryanair. Initial loads and yields have beenexcellent opening up the possibility of expanding theroute choice for summer 2012.The focus on the passenger experience continues andthe Airport was awarded the ACI Airport Service QualityAward for 2010 as the best European Regional Airport forCustomer Service.The Airport has entered into an agreement with WestonAviation to open an executive jet fixed base operation(FBO). This will be the first such dedicated facility at theairport and establishes a new niche opportunity.Humberside Airport has continued to focus on itssustainability and community engagement targets in2010. The airport was recognised at the NorthLincolnshire Business Awards in 2010 by winning theConoco Philips Excellence in Community RelationsAward.Humberside passengers (m)2011 0.32010 0.32009 0.4Aviation income – £ per passenger2011 11.32010 12.02009 12.2Commercial income excluding property– £ per passenger2011 9.02010 9.22009 8.4Operating costs – £ per passenger2011 24.32010 25.02009 21.3The Manchester Airport Group PLC Annual Report and Accounts 2010-11
11PropertyMAG’s investment property portfolio comprises offices,hotels and cargo properties managed by our MAGDevelopments team (MAGD).Property income earned by MAGD has increased to£27.0m (2010: £25.9m), due to continued levels of highoccupancy across the portfolio. A 6% void ratecompares favourably with the property market. The newdevelopment of starter units at Bournemouth werecompleted in 2010 and is now virtually fully let. Operatingprofits from MAGD have increased by 4.2% to £16.7m(2010: £15.2m)This year has seen an increase of £13.0m in the valuationof MAG’s investment property portfolio to £334.8m,reflecting the increased optimism in property as an assetclass. The Group continues to invest in its propertyportfolio, which during the year included construction ofa new four star hotel at East Midlands due to complete inthe autumn of 2011. The announcement of the AirportCity projects and Enterprise Zone at Manchester Airportis a significant opportunity for MAG Developments todeliver new developments levering off the internationalroutes at the airport and the investment in the groundtransport facilities at the station. The Government’sapproval of the Metrolink extension, due to be completedin 2016, will add to the portfolio of transport links servingManchester Airport and Airport City.OutlookThe Group continues to operate in a highly competitiveenvironment. The aviation industry continues toexperience cost pressures from ongoing high oil pricestogether with increasing costs of regulation and highlevels of customer uncertainty. Looking forward, weexpect aviation yields to remain under pressure asairlines seek to mitigate the impact of these pressures.MAG is however looking to grow improvements inpassenger numbers during 2011/12, and build onefficiencies that have been established over the pasttwo years.The Group will continue its focus on the key areas ofaviation, commercial and property development,sustainability, customer experience and our people.Much of this will be achieved through collaborativepartnership with our airlines and services partners.The Manchester Airport Group PLC Annual Report and Accounts 2010-11 2009-10
Page 5: 03Chairman’s StatementIt has been
Page 9 and 10: 07Manchester Airport was also very
Page 11: 09Such increases have compensated f
Page 15 and 16: 13Adjusting for the impact of the v
Page 17: 15Car parking yields have improved
Page 21: Corporate Responsibility19In all ou
Page 24 and 25: 22Corporate ResponsibilityOur commu
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Page 32 and 33: 30Report on Corporate GovernanceThi
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Page 36 and 37: 34The Board of DirectorsChairmanMik
Page 38 and 39: 36Directors’ Remuneration ReportE
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Page 44 and 45: 42Accounting PoliciesBasis of accou
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64Notes to the Consolidated Financi
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74Independent Auditors’ Report to
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78Notes to the Financial Statements
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80Principal Subsidiary Undertakings
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The Manchester Airport Group PLCReg
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