MAG calls for urgent review of Government travel rules as interim results show impact of restriction

• Passenger numbers for the first six months of the year were 82% down on 2019 as a result of summer travel restrictions
• Traffic increased to 58% of pre-pandemic levels in November after restrictions eased
• MAG is calling on the Government to review new Omicron travel restrictions after community transmission was confirmed

Manchester Airports Group (MAG) is calling on the Government to carry out an urgent review of its new travel restrictions as the Group released half year results highlighting the continuing major effect the measures are having on the travel and tourism sector.

Figures for the first six months of its financial year showed MAG passenger numbers remained 82% down on pre-pandemic levels, despite initial early signs of recovery over the summer. MAG airports welcomed 6.6 million passengers between April and September, compared to 36.4 million for the same period in 2019.

The Group, which owns and operates Manchester, London Stansted and East Midlands airports, saw year-on-year revenues increase by £64.9 million, but the figure was down 70% on the same period two years ago.

Overall, MAG reported a loss before interest and tax of £75.7 million for the six-month period. By contrast, the Group returned £172.7 million in profit for the same six months in 2019.

MAG's half year results cover the period 1^st April - 30^th September and were released after travel restrictions were reintroduced for passengers following the identification of the 'Omicron' variant. The Government's decision to bring back both Day 2 PCR and pre-departure testing for all travellers to the UK will hold back the recovery of international travel and the UK aviation industry.

Initial data suggests passenger numbers were down by 10-20% across the Group following the introduction of Day 2 PCR tests, which was announced on 27^th November, and that this impact has increased further over recent days following the introduction of pre-departure tests this week.

The Government has been clear these restrictions are 'precautionary' and 'temporary' measures to help slow down the arrival of the new variant into the UK.

MAG welcomed the Health Secretary's acknowledgement, on 8^th December, that there was less need to have any form of travel restrictions in place once Omicron becomes the dominant variant, and urged the Government to complete its review of these measures as soon as possible.

MAG welcomed 2.7 million passengers in October, which was the first month since February 2020 in which Manchester Airport and London Stansted Airport each served over one million passengers. Passenger volumes in November were at 58% of 2019, the closest they have been to pre-pandemic levels.

Charlie Cornish, MAG CEO said:

"The first half of this year tells a story of how travel restrictions held back the recovery of UK aviation, especially when compared to the rest of Europe.

"As restrictions eased, passenger numbers grew steadily at all three of our airports.

"The reintroduction of costly and inconvenient travel testing requirements has created further uncertainty and delayed our recovery.

"The Government has talked openly about the damage these restrictions cause to the travel sector, but neither they nor the Opposition have recognised the critical need to support our industry in return.

"As a business, we will always do our part to protect public health, but we also need these temporary measures to be removed when they are no longer worthwhile.

"These restrictions may have slowed the arrival of Omicron but it is now transmitting in the community, and the Government needs urgently to review whether the rapidly reducing benefit of testing justifies the damage it is causing to consumer confidence.

"MAG, and the wider UK travel industry, can be confident of a strong revival when travel restrictions are lifted. All we are asking for is to be able to plan for our recovery, and to be given the same chance that every other sector was given through the domestic roadmap earlier this year."

Manchester Airport served one million more passengers in the first six months of the year compared to the same period in 2020 and, following a 12-month delay, the airport's new Terminal 2 extension opened its doors to passengers for the first time in July this year.

The resumption of leisure travel to the United States, on 8^th November, was a significant moment for Manchester Airport's long-haul network, following the return of long-haul services to the Middle East, Africa and Canada earlier in the year. Virgin Atlantic's services to New York, Orlando and Atlanta have resumed, alongside Singapore Airlines' service to Houston.

Aer Lingus also announced in March it was creating a base at the North's global gateway for direct long-haul services to Barbados and the US, which launched in October and early December, respectively.

In response to the Government's announcement of the Integrated Rail Plan last month, MAG reaffirmed its position that the delivery of HS2 and NPR together was essential to driving growth across the North, and welcomed the news that a station at Manchester Airport on the network would go ahead. The station will allow passengers quicker and easier journeys to the North's global gateway, offering cultural and leisure benefits, creating economic growth through direct links to important international markets, and driving the Government's levelling-up agenda.

London Stansted Airport served 3.5 million passengers between April and September, up 59% on last year. The airport's recovery was the fastest among major UK airports. According to CAA data, in September the UK's fourth largest airport had seen 43% of its pre-pandemic traffic return.

In May, it was announced Uttlesford District Council had lost its appeal to block London Stansted's planning application to increase its passenger capacity from 35 to 43 million passengers per annum. The Planning Inspectorate's decision will allow the airport to reach its projected growth in passengers, without any additional flights or disruption for local communities.

East Midlands Airport also saw demand for its popular European holiday destinations return as restrictions eased, with numbers up 33% on 2020, after its passenger operation was paused for six months at the height of travel restrictions. The UK's largest pure freight airport, which was shortlisted for Freeport status in March 2021, has also seen its cargo operation remain strong throughout the pandemic.

In the first half of this year MAG also made key announcements on its sustainability strategy in its pursuit of becoming a Net Zero Carbon business by 2038. In October, the Group published its annual CSR Report and announced a carbon offsetting scheme at all three of its airports, in partnership with CarbonClick. The scheme allows passengers to offset their emissions from their flight, regardless of airline or destination, and support sustainability projects in the UK and abroad, promoting biodiversity and decarbonisation.

Ahead of COP26 in Glasgow, MAG also signed a Memorandum of Understanding with Fulcrum BioEnergy UK, which will secure a direct pipeline connection for Sustainable Aviation Fuel at Manchester Airport. The Group was also ranked first among European airport operators for ESG by GRESB in October this year.

Manchester Airports Group headline financials for the six months ended 30^th September 2021

Summary trading performance