MIA 2021 revenue up by €15.2m, passenger traffic up 45%

Malta International Airport (MIA) registered an increase of 45.3% in passenger traffic for the period between January and December 2021 compared to 2020, with a total of 2,540,335 passenger movements registered during the year under review.

This increase in passenger movements was registered on the back of an increase of 29.2% in aircraft movements and an improvement of 34.5% in seat capacity over 2020.

Seat load factor (SLF) registered an improvement of 4.6 percentage points over 2020 to stand at 61.4%, but remained substantially lower than the 81.8% achieved in 2019.

Whilst the traffic performance for 2021 marked an improvement over the previous year, passenger numbers for the year under review were still 65.2% below 2019 levels, as uncertainty and instability continued to characterise the year.

The revenue generated by the group during the year under review increased by €15.2 million, from €32.2 million in 2020 to €47.4 million in 2021.

This marked an increase of 47.4% in line with the increase in passenger movements.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) of the group increased by €18.5 million, from €5.6 million in 2020 to €24.1 million in 2021.

EBITDA margin improved by 33.4 percentage points, from 17.4% to 50.8%. While the Group had registed a net loss of €4.3 million in 2020, it closed off 2021 in the black with a net profit of €7.0 million.

MIA this week announced an investment of almost €40 million in the construction of a new apron, which will equip the airport with the aerodrome infrastructure needed to handle future growth, was today given the green light by Malta International Airport’s Board of Directors.

The Apron X project will see the development of an area measuring around 100,000 square metres, which is roughly comparable to the size of 14 football pitches.

This development will significantly improve the airport’s aircraft parking capacity and its ability to better handle mixed-fleet operations, particularly during peak hours in summer.

Apron X will introduce new parking stands that can accommodate either seven Code C or three Code E aircraft, with the former being the more common aircraft type to land at Malta International Airport, in addition to 20 existing stands available on Aprons 8 and 9.

Challenges

In its annual report and financial statements, MIA plc said Q1 was very challenging as restrictions and lockdowns that came into force across Europe led to airlines deciding to operate a minimal schedule.

This resulted in a drop of 86.5% in seat capacity and a corresponding drop of 90.2% in passenger movements. In the meantime, the roll-out of vaccination programmes in Europe was underway.

However, vaccination uptake and vaccination coverage among the adult population varied heavily across Europe, with this situation extending into the first half of Q2.

The government’s announcement that June would mark the restart of tourism to the Maltese islands, together with the announcement of incentives for industry operators, led to expectations of a strong recovery in the second half of Q2.

Nonetheless, uncertainty regarding entry restrictions and the recognition of vaccination certificates, ultimately resulted in a delayed recovery.

June’s improved flight schedule then contributed to a significant increase of 884.3% in overall seat capacity for Q2 compared to the same period in the previous year.

The increase seen during this quarter was so significant partly because airlines had not been operating scheduled flights in Q2 2020.Malta’s robust vaccination programme made headlines throughout Europe and led to Malta being added to the UK’s green list on 30 June.

This constituted a significant development, particularly given that the UK had been Malta’s top market prior to the outbreak of the COVID-19 crisis.

Another important development was the coming into force of the EU Digital Covid Certificate on 1 July 2021, allowing for a more uniform approach to travel restrictions among EU member states and more stability for travellers.

Whilst the initial signs of recovery reported by MIA in the wake of these developments were encouraging, a downward trend was observed in mid-July when Malta changed its restrictions and became the first EU member state to close its borders to all but vaccinated passengers.

Despite this decision, a number of airlines continued to resume operating routes and to increase the frequency of flights, with Q3 ending with a 113.2% increase in passengers compared to 2020.

Due to the delayed recovery, the demand for air travel peaked in October, rather than August as is traditionally the case, contributing to Q4’s positive traffic result.

Whilst a busier schedule for the 2021 – 2022 winter season was expected when compared to the previous season, more stringent travel restrictions were introduced across Europe in mid-quarter 4, in an effort to curb the spread of a new COVID-19 variant.

This led to flight cancellations and drops in frequency on several routes, especially after the Christmas holiday peak, with the full impact of these decisions being experienced in Q1 2022.

Principal activities

Malta International Airport plc’s principal activities are the development, operation and management of Malta International Airport, for which the company has a 65-year concession that came into effect in July 2002.

The company has three 100% owned operating subsidiaries; Airport Parking Limited, SkyParks Development Limited and SkyParks Business Centre Limited.

Airport Parking Limited operates all car parks situated on the land leased to Malta International Airport plc, whilst SkyParks Development Limited and SkyParks Business Centre Limited manage the SkyParks Business Centre building.

MIA plc also has another 100% owned subsidiary - Kirkop PV Farm Limited - set up with the intention to explore opportunities in the generation of electricity using photovoltaic technologies. Kirkop PV Farm Limited, however, did not trade in 2021.

Aviation industry

During the year under review, MIA identified a number of strategic, corporate and operational risks and uncertainties.

The aviation environment is expected to remain difficult, with numerous factors bearing a direct impact on the industry’s recovery.

Several trends indicate that fierce competition and pressure on yields will persist.

Overcapacity may potentially result in market exits of competitors and declining airlines yields, negatively affecting the performance of the Group.

Additionally, business travel is predicted to continue recovering at a much slower pace than leisure travel. This could lead carriers that were traditionally associated with corporate travel to explore opportunities to foray into the leisure market.

Malta International Airport recorded strong traffic growth in the run-up to the COVID-19 crisis , with significant growth rates for the four years rolling from 2016 to 2019.

As a result, aprons and the terminal building had been operating at capacity during peak times.

While the pandemic outbreak resulted in a major downturn in international travel demand, MIA aims to retain its focus on ensuring that current capacity remains sufficient not only to bridge short-term uncertainty but also to ensure that the terminal and airside infrastructure can cater for stabilised demand recovery and future growth over the longer term.

Employees

MIA plc employed an average of 329 employees during 2021, which average marks a drop of 12.7% over the previous year.

This drop was primarily brought about by natural attrition, as a number of employees who left the Company were not immediately replaced.

In total, the Group had 324 employees at year-end, including four employees working with SkyParks Business Centre and five employees working with Airport Parking Limited.

This total translates in a decrease of 7.2% over the end-of-year headcount for 2020.

Around 71% of employees were employed on a full-time basis for an indefinite period, whilst 20% were employed on a full-time basis for a definite period. Nine per cent of employees were employed on a part-time basis.

The employee turnover rate for the group in 2021 was 14.0%, whilst the average length of service was 10.8 years.