The chief executive of Manchester Airports Group is seeking international expansion as the aviation industry recovers from the pandemic.
Ken O’Toole said the company, which owns Manchester, London Stansted and East Midlands airports, wants to sign commercial deals to manage others overseas in the short term before considering buying another hub.
“Pre-Covid, we bid on a number of international opportunities. And I am quite keen that we continue to look at those commercial opportunities,” he said.
O’Toole hopes to capitalise on plans by some state-owned airports to shake up operations and “re-energise” in an effort to attract more passengers following the pandemic.
Although large airports and those in regions popular with tourists have rebounded strongly, some of the smaller airports are struggling to recover.
Passenger numbers at airports that handle less than 1mn travellers a year are a third below their pre-Covid-19 levels, according to industry body ACI Europe.
O’Toole’s company, owned by Manchester City Council, IFM Global Infrastructure Fund and the nine other Greater Manchester local authorities, has a public-private ownership structure that would give it an edge over “aggressive” infrastructure funds in the race to expand, he said.
“The conversations I’ve had with governments around the world, people see that as a very positive characteristic, and probably one more aligned to strategic long-term partnerships than some of the more aggressive funds that have come in and run airports in different places,” he explained.
In the longer term, he said the company would consider adding to its portfolio of airports, with a focus on international expansion rather than the UK in order to diversify.
On the outlook for the industry, O’Toole expected “a degree of stabilisation” in ticket prices following two years of sharp rises.
His view his backed by several European airlines, which have signalled that the multiyear surge in fares, caused by strong demand for travel at a time of aircraft shortages, could peak this summer.
“We want our airline partners to be commercially viable. [But] do I think 20 per cent air fare growth over the past two years is a viable consumer proposition? No.”
Most notably Ryanair, Europe’s largest airline by passenger numbers, said fares across its network this summer would be flat or “modestly ahead” of last year, down from a previous forecast of a 10 per cent increase.
MAG plans to spend £2 billion across its three airports, increasing their passenger capacities over the next five years. O’Toole said he hoped the next UK government would remain supportive of airport expansion.
The UK’s most recent policy framework for such development was published in 2018. It backed a new runway at Heathrow, and other airports “making best use” of existing infrastructure.
Airports have seized on this to launch a series of expansion plans. Taken together, the proposals of the UK’s eight biggest airports would create the capacity to fly almost 150mn more passengers a year.
O’Toole said he believed expansion and the net zero climate target remained compatible, in line with the aviation industry’s decarbonisation plan, which was backed by the government in 2022. – Copyright The Financial Times Limited 2024
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