As Menzies restructures its UK cargo business what does this say about the airfreight market?

The UK’s Menzies Aviation, the aviation services subsidiary of John Menzies plc, has announced a restructuring of its UK cargo business. Menzies will now focus its UK cargo business on its London Heathrow operations, together with smaller operations in Aberdeen and Belfast, and exit its cargo operations at Glasgow, Birmingham, East Midlands and Manchester airports.  Outside of London, Birmingham and Manchester are at the centre of the largest metropolitan areas in England, Glasgow is the largest in Scotland and East Midlands airport is one of the UK’s premier cargo airports, serving one of the fastest growing regions by population in the country. So why are these operations not profitable for Menzies and what does this say about the cargo business generally? [1784 words]

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This report contains the following subheadings:

• GBP3 million write off
• Overcapacity squeeze
• Manchester’s cargo figures compare badly with passenger growth
• Glasgow sees huge freight increase
• Shedding sheds

This report contains the following charts and tables:

• Menzies’ Revenue, EBITDA, EBITDA margin and RoCE: 2003-2010
• Table of total freight development in Europe: 2009-1Q2012