Revenue and passengers down; profits up
06.08.11
A cost-cutting program helped Birmingham Airport post an eight-fold increase in profits last year, despite a fall in passengers and revenue. Birmingham Airport Holdings reported after-tax profit up from £592,000 in 2010 to £5.28m in the 12 months to March 31 2011, despite revenue falling by 0.8% to £103.3m, the Birmingham Mail reports.
The rise in profitability in a year hit by the continuing downturn and Icelandic volcano that saw planes grounded for six days came after employee costs were reduced by over 11%, from £23.4m to £20.8m. The number of people working at the airport was reduced by 75, in part as a result of a voluntary redundancy scheme.
Passengers fell from 9m to 8.5m – the third consecutive year of decline - despite a 4% rise in long-haul traffic. Chief executive Paul Kehoe said: 'It would have been 8.7m last year but we lost 200,000 because of the volcano in Iceland. We are budgeting for this year 8.7m, so we are saying it is going to be flat. Is that the bottom of the curve? I hope so.’
He added that while short-term measures had been taken to combat a fall the passengers and revenue, the airport was at the mercy of the wider economy – particularly in the region. He said: ‘We need the economy of the West Midlands to start to recover. If it starts to perform, we will start to perform.'
The fall in revenue at the airport came as a 2.3% fall in aeronautical income more than cancelled out a 0.8% rise in commercial income.
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