Manchester Airports Group buys London Stansted Airport – Monarch and Jet2.com on route shopping list?

When Manchester Airport Group’s CCO, Ken O’Toole, left Ryanair, did he realise that he was going to have to spend so much time back at the airline’s Dublin HQ?

When Manchester Airport Group’s CCO, Ken O’Toole, left Ryanair, did he realise that he was going to have to spend so much time back at the airline’s Dublin HQ? Ryanair is the largest airline at all four airports in the freshly-expanded MAG, commanding 14% of Manchester weekly seats, rising to 78% at London Stansted. Ken will also be spending time with Monarch and Jet2.com to see if they want to make London Stansted their next base.

Manchester Airports Group (MAG), which currently operates Manchester, Bournemouth and East Midlands airports in the UK, has agreed to buy London Stansted Airport from LHR Airports Ltd (LAL) – formally known as the BAA for £1.5bn (1.8bn euros).  The forced sale, expected to be complete by the end of February, was demanded by the UK Competition Commission, sees the UK’s third and fourth largest airports merge under one brand. The purchase represents the next step in the continuing UK airport ownership saga, which has seen LAL dispose of Edinburgh in April 2012 — again a UK Competition Commission forced sale — to Global Infrastructure Partners (GIP), operator of London City and London Gatwick in December 2009.

MAG consolidates #3 spot

The arrival of London Stansted into MAG does not change the ranking of the top five UK airport groups (but does give us lots of unglamorous acronyms to juggle):

  1. LAL (Aberdeen, Glasgow, London Heathrow and Southampton);
  2. GIP (Edinburgh, London City and London Gatwick);
  3. MAG (Bournemouth, East Midlands, Manchester and now London Stansted);
  4. Abertis (Belfast International, Cardiff and London Luton);
  5. Peel/Vantage (Liverpool, Doncaster Sheffield and Durham Tees Valley).
Top 5 UK Airport Groups Cummulative 2012 passengers (millions)

Source: Innovata April 13.

However, while GIP’s lead over MAG (the “GIP-MAG gap”?) has been drastically reduced to just 4.5 million passengers, both still lag significantly behind the market leader LAL, which is almost double their size and growing at a faster rate – its four airports grew by 1.3% overall in 2012, compared to GIP and MAG (including STN) which grew marginally by 1% and 0.6% in 2012 respectively. The remaining UK airport groups are still grappling with declines – Abertis’ UK facilities saw passenger throughput drop 1%, while the Peel/Vantage UK airports fell 15% over the past 12 months.

Ken to spend more time in Dublin

When MAG’s CCO, Ken O’Toole, left Ryanair, little did he realise that he was going to have to spend so much time back at the airline’s Dublin HQ – as the Irish low-cost carrier is the largest airline at all four airports of the freshly-expanded MAG. In terms of capacity, Ryanair commands 14% of Manchester Airport’s weekly seats, rising up to 89% at Bournemouth, with the majority of market share at East Midlands (68%) and London Stansted as well (78%).

#1 Airline #2 Airline #3 Airline #4 Airline #5 Airline
Manchester Ryanair easyJet Flybe Thomson Monarch
London Stansted Ryanair easyJet Germanwings Pegasus Thomson
East Midlands Ryanair Flybe Jet2.com Thomson Thomas Cook
Bournemouth Ryanair Thomson Aer Arann
Source: Innovata Apr 13

Clearly London Luton (home to easyJet and Thomson), as well as Exeter (Flybe) will also feature highly on Ken’s “meet the important customer” roster, in addition to hopping across to Dublin to see his old boss. Being the shrewd operator that O’Toole is, no doubt he will be eyeing any airlines currently flying into the group’s existing airports to see if there are any synergies of introducing them to a complimentary London Stansted operation.

With Monarch’s growing significance at East Midlands (it is the #6 airline there) and Jet2.com’s clout at Manchester (#7 carrier), these airlines may be the first airlines to receive a call from O’Toole to see if they want to make London Stansted their next base. However, the doors may well be hard to open at the Leeds Bradford Airport — home of Jet2.com — following its recent decision to start an Alicante base later this summer — as revealed exclusively by anna.aero.

Stansted mega-hub for London?

This change in ownership of some of the UK’s biggest airports may yet have even more significant connotations, as the UK Government continues its review of airport growth policy and capacity under the guise of an Airports Commission chaired by Sir Howard Davies which is meant to take the decision over London’s runways out of the politicians hands by “identifying and recommending to Government options for maintaining the UK’s status as a global aviation hub.” Membership of the Howard Commission includes the former CEO of MAG, Geoff Muirhead. Far be it from anna.aero to presume that Mr Muirhead may instinctively favour a “London Stansted” solution to the UK capital’s chronic airport capacity issues when it makes its first report at the end of this year!


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