MAG warns the 10 councils that own it that they may not get any dividends till 2027
The Manchester Airports Group (MAG) owns Manchester, Stansted and East Midlands airports. MAG is owned by Greater Manchester’s 10 councils, which used to make huge profits from their airports, before Covid. Several other UK airports, such as Birmingham, are owned by councils. Since the start of the pandemic, many airports have had to be given loans by the councils that own them. Now the MAG councils have been warned they might not receive any dividend from their ownership of MAG airports, until 2027. Several councils have become dependent on the airport money – which is a problem, if they aim to cut carbon emissions, but need as much (high carbon) flying as possible, to pay their bills and provide council services. MAG last paid dividends in 2019, sharing £110m amongst its shareholders. Manchester City Council owns 35.5% of MAG; 9 authorities, the Metropolitan Boroughs of Bolton, Bury, Oldham, Rochdale, Stockport, Tameside, Trafford, Wigan, together with Salford City Council, collectively own 29%. Australian investment fund Industry Funds Management owns 35.5%.
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Covid: Airport group ‘halts dividend payments to councils’
Greater Manchester’s 10 councils have been warned they might not receive any dividend from their ownership of an airport group until 2027 because of Covid, a council leader has said.
Neil Emmott, leader of Rochdale Council, said it was a “serious blow” as the payment had been a “lifeline”.
Manchester Airport Group (MAG) last paid dividends in 2019, sharing £110m amongst its shareholders.
The BBC has approached MAG for a comment.
MAG, which owns Manchester, East Midlands and London Stansted airports, is privately managed on behalf of its shareholder.
IFM Investors and Manchester City Council have an equal shareholding of 35.5% while the nine other Greater Manchester councils – including Rochdale – own a combined total of 29%.
‘Hit heavily’
Speaking to BBC Radio Manchester, Mr Emmott said he had been informed that the council would not receive a dividend “for at least another four or five years because of the Covid pandemic”.
“It has always been that lifeline that comes in and often helps us out. But obviously due to the pandemic the airport has not been in a position to do that,” he said.
“We’re going to be hit pretty heavily on that score for the next couple of years.”
But Mr Emmott said Rochdale’s local authority had been “very prudent” in its budget for the year.
“We think people are being hit quite heavily at the moment so we are going to try to keep those costs down as far as possible,” he said.
“But at the same time we need to protect our vital frontline services that our residents expect to see for their council tax.”
https://www.bbc.co.uk/news/uk-england-manchester-60418219
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Liverpool Airport receives £34m loan from combined authority due to Covid-19 impact
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Manchester Airports Group to get £260m that its 10 council owners borrow from government
In the absence so far of financial support from government, the ten Greater Manchester local authorities – which have a majority stake (64.5%) in the Manchester Airports Group (MAG) – are planning to borrow themselves in order to lend £250 million to it. MAG owns Manchester, Stansted and East Midlands airports. The councils have privately agreed to take out significant levels of low-interest borrowing from the government’s loan board. They may not start to see any repayments for a couple of years, but are hoping that by that point it will have returned to some semblance of normality. Manchester council is expected to provide the biggest share of the loan package, at around £143m, in line with its larger stake in the company. It is understood the other nine boroughs are expected to put in £13m each. Senior local authority figures said the move was aimed at protecting significant long-term town hall investment in the airport, along with safeguarding tens of thousands of jobs that rely on it as a major engine of the local economy. Manchester airport still has a couple of arriving flights per day. It is possible that as many as 50,000 jobs may be directly, or indirectly, linked to the airports. If the sector has to shrink in future, many of those jobs may be lost.
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Birmingham airport hands out £13 million share dividend to Birmingham City Council
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The Manchester Airports Group (MAG) owns Manchester Airport, East Midlands and Bournemouth airports, and now Stansted. MAG is owned by the 10 councils of Greater Manchester. Manchester City Council owns 35.5%, and 9 authorities, the Metropolitan Boroughs of Bolton, Bury, Oldham, Rochdale, Stockport, Tameside, Trafford, Wigan, together with Salford City Council, collectively own 29%. Australian investment fund Industry Funds Management owns 35.5%. MAG has made a greatly enlarged dividend to its shareholders, through buying Stansted and the large investment from IFM. MAG has agreed to increase its dividend from £20m in 2012 to £72m, which includes an additional one-off dividend of £30m. From this £48m will be shared between Greater Manchester’s 10 local authorities, with Manchester getting some £26 million of it and the remaining 9 sharing some £22 million, in proportion to their shares. In contrast the dividend has been £20m for the past 4 years. Manchester Airport has been in public ownership since 1938, and public money has been invested in it. The councils benefiting say they do not spend the money on specific projects, but subtract it from the total amount they must save after government cuts. It may be used partly to invest in the local economy, to raise skills and create jobs.
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