OCR 2880 (ACE) - Revenues by Activity

The June 2009 case study for OCR A2 Business Unit 2880 (ACE) is closed based on a real business (East Midlands Airport). We’ve dug out some of the detail behind some of the data presented in the case study as a way of helping students develop their thoughts on the strategic issues facing the business. Here is some information on revenues:

The case study points out that, in 2008, total revenues were £54 million [line 8]. For East Midlands Airport that was actually the figure for the year ended 31 March 2007 (the date is not significant in terms of how students should address the case). In the chart below, we show the breakdown of revenues by each of the four main income categories:

Cargo and passenger-related aircraft charges are combined in the accounts of East Midlands Airport. Together they represent around £30m of turnover (just under 60%).

Car`parking, as suggested by the case, is also a substantial revenue earner. Of the £54m revenue, around £10m comes from car parking charges (just under 20%).

Concession income from retail outlets is also substantial, at around £10m (2again, a little under 20%). As the chart shows, this was the fastest growth area in the last year.

“Other income” includes property rents and other charges for other businesses that use the airport location and facilities.