11 June 1999
The sale, thought to be in the region of £12m, was announced on June 8. Under the terms of the deal, Manchester, which is run by 10 local authorities, will buy an 82.7% stake in Humberside, previously run by four councils. East Riding, Hull and North East Lincolnshire councils are all being bought out by Manchester. North Lincolnshire will retain its 17.3% share.
'We could see the potential,' said Brian Harrison, chairman of Manchester Airport Board. 'It has a 3.5 million population catchment area. That is a pretty good market to go at.'
Humberside, though, will be a test of Manchester's business acumen. About 340,000 people – only 0.2% of all UK passengers per year, according to the Civil Aviation Authority – use the north Lincolnshire airport. In 1998, it made a loss of £1.6m on a turnover of £5.4m. Most of the flights it offers are Mediterranean charter operations.
Manchester is expected to try and expand these routes as well as scheduled flights. It has also found itself immediately involved in a fight for passengers in the Yorkshire and east coast region.
Next week Peel Holdings, which owns a 76% stake in Liverpool airport, will unveil plans for a £30m development of a former RAF base at Finningley near Doncaster. Peel is hoping to develop the site, which is just 33 miles from Humberside, to attract 2.3 million passengers by 2014, it said this week. Humberside will also face competition for passengers with other nearby airports including Norwich, East Midlands and Leeds Bradford.
Manchester, though, remains unworried. 'We are successful entrepreneurs within the public sector,' said Harrison 'We are good airport operators. We know we can run them well.'
Chris Jasper, business editor at Flight International, said Humberside would have to make the most of the catchment area. Financially, Manchester has the money to fund expansion.
In 1997/98, it announced profits of £60m on a £260m turnover. In the next few weeks, it will announce figures for 1998/99 which are expected to show a similar profit margin.
PFjun1999
