Cosmos pulls out of Manston as US flight plans grounded

Package holiday giant Cosmos has this morning confirmed it has pulled the plug on its planned flights to the US from Thanet's Manston Airport. The tour giant, which promised to make the Thanet airport a major departure point for flights to the United States, has failed to sell enough seats both in the UK and US.

It is understood the flights to and from Virginia had sold just 600 tickets in the UK - and a mere 200 in the US. That represents just ten per cent of the tickets available for the planned weekly service. It is a blow to Kent County Council which backed the operator as soon as it showed interest in using the airport and forged new links with the state of Virginia, in the east of the US, south of Washington. Kent County Council leader, Paul Carter, said:

"The direct flights project was just one part of our initiatives to regenerate East Kent. It was a calculated risk that had significant potential and could have delivered major benefits for the region. Enormous efforts have been made on both sides of the Atlantic to promote the flights. But, despite putting back the deadline for decision three times, in order to see if the market would respond and pick up, sales have failed to reach a critical mass. In the absence of any other organisation prepared to share the financial risk of continuing with the project, it would not be prudent or viable to invest public money in the venture. We will now redouble our efforts to stimulate inward investment and economic regeneration."                

The council is believed to have already sunk in £100,000 into the project of council tax-payers money. The county council lost a similar figure after backing Irish airline EUJet which started operating out of Manston two years ago but failed to make the project work. Cosmos began promoting its flights to Virginia last October and flights were expected to begin from May this year. But today it was impossible to book flights out of Manston via the tour operator's web site. All monies will be refunded to travellers who have already booked on the service or an alternative offered.

YourCanterbury 28th Feb 2007

Kent's investment in US event "value for money"

What were they thinking?

Kent County Council is to spend £225,000 as a joint sponsor of a major cultural festival in America, it has emerged. The council has agreed to become a key financial backer of the Smithsonian Folklife Festival in Washington in 2007 as part of a drive to boost the number of American tourists coming to Kent. Council chiefs say the investment represents “value for money” and could eventually deliver a £50 million fillip to the county’s tourism industry.

While KCC’s involvement with the festival in 2007 has been public knowledge for some time, its financial investment has not previously been disclosed. Details were released to the Kent Messenger Group in response to a request we made under the Freedom of Information Act. It has also emerged that KCC is separately spending a further £265,000 developing its links with Virginia. KCC deputy leader Cllr Alex King, who is spearheading the council’s participation in the festival, said:

“The potential is very significant in terms of the impact on the Kent economy. What we have to do is promote Kent in a way which promotes the county elsewhere coherently and effectively. We have a very strong partnership with Virginia, which will lead to two-way tourism. In my view – and it is a conservative estimate – we can bring £50m into the Kent economy and if we get it right, the impact will last for a lot longer.”

But he conceded that KCC could not be assured of a return on its investment.

“There are no guarantees in this. Sometimes, you have to take a punt. But in two weeks, one million people visit the festival and it is the biggest event of its kind in North America. It is very good value for money.”

KCC says its presence will give it a “shop window” to promote the county to potential visitors, with exhibits and performances by Kent-based artists, craftsmen, food producers and musicians. Cllr King said some of the £225,000 would be used to meet the costs of groups or individuals participating but commercial enterprises would have to pay their own way.

“I am not funding anything which will pay for itself.”

The decision to become involved in the festival is a result of Kent’s efforts to exploit its historic links with the state of Virginia. Those links go back 400 years, when many of the first settlers in Virginia came from the county.

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What is the Smithsonian Festival?

The free 10-day festival, founded in 1967, promotes itself as a global “cultural celebration” focusing on showcasing, through exhibits and performances, traditional arts and crafts from America and elsewhere. It is held outdoors on the National Mall at Capitol Hill in Washington DC and is visited by more than one million people.

Kent County Council’s financial backing for the Smithsonian Festival is not the only money being spent on its efforts to forge closer ties to America. It has allocated £265,000 to a project to “identify and develop links between Kent and the Commonwealth of Virginia, USA”.

A further £50,000 is being spent on a marketing campaign “to position Kent as a destination of choice for US visitors”. Meanwhile, consultants have been paid £50,000 to examine if direct transatlantic flights between Manston Airport in Thanet and the USA would be commercially viable.

The money is coming from the Kent Regeneration Fund, which is worth £1.5million a year. The fund is used to allocate grants to initiatives or projects that could help boost the Kent economy. It was used by KCC to make a £121,000 investment in EUJet, the low-cost air operator based at Ramsgate’s Manston Airport. The company went into administration last year and KCC lost its money.

While the fund is public money, Cllr King said it did not add to the burden on taxpayers as it was generated from the windfall resulting from the development at Kings Hill.

kentonline 13th Jan 2006

Airport's new owners 'in for the long haul'

Steve FitzgeraldKent International Airport could be as busy as Glasgow Prestwick in five years, according to Manston’s new boss. The forecast comes just weeks after Infratil, the New Zealand investment company, bought the Thanet airport from the administrators of former owners PlaneStation for £17 million.

Infratil already owns Glasgow Prestwick which has seen a surge of growth in recent years, employing 500 people directly with a further 3,500 jobs related to the airport. Steve Fitzgerald, chief executive of Infratil Airports Europe, said:

"Sure, this could become another Glasgow Prestwick within five years. There are a lot of parallels between the two operations. Glasgow Prestwick is probably five years ahead of Manston at the moment. We’ll be targeting Manston in a slightly different direction. But in terms of can it get to two to two and a half million passengers, can it get to 34,000 tonnes of cargo? Yes."

The catchment areas are similar with the main difference that round-the-clock flying was permitted and local people seemed to be wholeheartedly behind the airport.

"People are used to it and understand the positives the airport brings."

He pledged to re-engage with the local community and speak to residents about Infratil’s plans. Infratil has already notched up an early success by winning back the custom of freight operator MK Airlines, which defected to Europe last year after complaining about high landing fees. On the passenger front, Mr Fitzgerald has spoken to dozens of airlines about the advantages of Manston.

He is optimistic that a scheduled airline will sign a deal before next summer. But he said it was unlikely to be on a similar scale to EUjet, grounded by financial problems after less than a year. Mr Fitzgerald said EUjet started with too many routes without having enough time to build brand recognition and customer loyalty. He said:

"EUjet tried to replicate a Glasgow Prestwick operation overnight when it was built up there over 10 years by Ryanair. It can be done but it takes more patience. It’s arguably desirable to have several different airlines serving the airport and even some that aren’t based in the UK."

Mr Fitzgerald confirmed Infratil was in for the long haul, with plans for steady growth over the next 20 years.

"Our business model is a 20-year model and it shows that on a modest build-up of traffic, we’ll be losing money for three years. We think it’s an exceptionally good long-term investment. Infratil has a brand with a good long-term view and a track record of delivering returns for long-term investment."

kentonline 13th Oct 2005

KCC defends £100,000 airline gamble charge

Council chiefs have rejected claims that their decision to invest £100,000 of public money in EUJet was a gamble that backfired. Cllr Alex King (Con), Kent County Council’s cabinet member for regeneration and the man responsible, said he accepted the investment was high risk but claimed it had produced "a good return" for Kent by demonstrating that a budget airline could be viable from Manston.

KCC lost its £100,000 investment when EUJet faced financial problems. The authority subsequently agreed to put in an additional 15,000 Euros to provide "working capital" to PlaneStation, the company that owned Manston Airport but which recently went into administration. At the time, company bosses told KCC that the operation would collapse if it did not put in the additional money.

Cllr King was grilled over his decision when he appeared before KCC’s cross-party cabinet scrutiny committee on Thursday. He was challenged by opposition Labour members, who said that in view of a warning from officers that any investment would be "high risk", the decision "beggared belief". Cllr King said:

"If you look at the period over which EUJet operated, 300 jobs were created and more than 300,000 people flew the airline. That is not a bad return. Had we not made the investment, we might now be in a situation where no passengers were flying out of Manston, PlaneStation would be staggering along and there would be very little hope for the future."

He admitted that he had not formally consulted anyone else in KCC’s cabinet about the investment but denied he was under any obligation to do so. The money had come from the Kent Regeneration Fund, consisting of money raised from the sale of Kings Hill, near Maidstone. He said:

"There was no need or requirement on us to consult. I did inform colleagues and it was announced widely in the press and we got a lot of plaudits and praise for doing it."

Meanwhile, KCC’s finance director David Lewis, who also appeared before councillors, said:

"This was not a gamble but a carefully calculated risk. By definition, not all risks pay off and I am sorry that it did not work out and this particular risk did not pay off."

The sum was a tiny fraction of KCC’s overall budget of £1.3billion, he added.

kentonline 30th Sep 2005

Questions still remain over EUjet collapse

Mystery surrounds the delay in appointing administrators to failed airline EUjet. While Grant Thornton partners are sorting out the financial affairs of PlaneStation, the airline’s parent company that collapsed with estimated debts of £22million, and subsidiary London Manston Airport Plc, EUjet is not subject to the same rules.

The Irish-registered operator, which was grounded last week with the loss of at least 127 jobs and left more than 5,000 passengers stranded, is still run by its directors, including chief executive P J McGoldrick. The airline is subject to Irish law and an "interim examiner" is understood to have been appointed but this person does not have the power of administrators. Dr Michael Grimes, an airline consultant based in Ireland, said the delay suggested that the banks were happy with Mr McGoldrick:

"I would say he’s left PlaneStation holding the baby."

Administrators asked awkward questions, he added. The present situation left EUjet creditors "in limbo" not knowing against which company to claim. EUjet is clearly pinning the blame for its grounding on PlaneStation. Callers to its Shannon offices are told that flights have been suspended "due to financial difficulties experienced by our parent company PlaneStation".

This has angered Grant Thornton which blames PlaneStation’s demise on EUjet. A spokesman said:

"The airline consistently failed to meet the numbers and ran out of money and at that point PlaneStation wasn’t in a position to offer any more. At no time did the Bank of Scotland lend any money to EUjet. It all went through PlaneStation. PlaneStation kept pumping cash into the airline but the credit line eventually ran out. PlaneStation went to its bankers who said 'we’ve never lent a penny to an airline and we never will'."

Administrators hope their decision to keep around 70 staff at the airport will signal that it could quickly be brought back into use. But they warn it could take months to find a "credible" buyer. Meanwhile, Kent County Council, chastened by its failed gamble to pump £100,000 into EUjet, has rejected calls for an official investigation into what went wrong. Cllr Alex King, Cabinet Member for Regeneration, said:

"It would be unfortunate if anyone asked for a DTI inquiry."

He admitted KCC’s investment, from the Kings Hill development fund, had been a risk – he knew that many people had questioned EUjet’s viability – but risks had to be taken to lift the county. The opportunity to get a passenger airline operating out of Manston was a major opportunity that could not be ignored. And it was a significant achievement that EUjet had operated for nine months and carried more than 300,000 passengers. He dismissed speculation that the airport, a key plank in KCC’s economic strategy, could be used for housing development:

"The county council is determined that Manston will play its part in the transport infrastructure of Kent as an airport."

kentonline 4th Aug 2005

EUJet doomed from the start

Expert claims airline was doomed from first flight

EUjet was a flawed business model that was bound to fail, according to an airline expert. The low-cost airline and its owner PlaneStation, which also owns Kent International Airport at Manston, crashed into administration on July 26 after the Bank of Scotland pulled the plug on PlaneStation’s credit line, thought to be around £25million.

The collapse left thousands of passengers stranded overseas, cost hundreds of jobs and cast a shadow over the longer-term viability of scheduled services operated out of Kent. It was also embarrassing to Kent County Council which had invested £100,000 in the fledgling airline to bring it to Manston.

One expert who long ago pointed out potential problems with EUjet is Dr Michael Grimes, an airline consultant based in Cork, Ireland, close to EUjet’s registered base in Shannon. He warned Kent County Council, the Civil Aviation Authority and PlaneStation but says his warnings went unheeded. Speaking to Kent Business as joint administrators at Grant Thornton attempted to sort out the financial affairs of PlaneStation and London Manston Airport Plc – Irish-registered EUjet is subject to different rules – Dr Grimes said the business model was flawed in his view. He claimed the fare structure was unrealistically low and that the Fokker-100 aircraft used by EUjet were uneconomic and unreliable.

P J McGoldrick, the airline’s colourful Irish chief executive, whose son Stuart became EUjet commercial director, revealed that one plane had been out of service for most of the year. Dr Grimes said:

"They might have had a chance if they’d had a proper plane for the job but the Fokker-100 never made any money for anybody."

He claimed that leasing charges on the aircraft were exorbitant and he had serious concerns about P J McGoldrick. He was previously involved in Ryanair at a time when it was a loss-making airline. Kent County Council was aware that Mr McColdrick was also involved with an airline that collapsed in 2000 with reported multi-million pound liabilities and the loss of hundreds of jobs.

Dr Grimes said he had sought an investigation into the running of EUjet and PlaneStation but no action was taken. He claimed that his letters to KCC leader Sir Sandy Bruce-Lockhart went unanswered and telephone calls were blocked.

"These people have themselves to blame because all these deficiencies were notified to the relevant authorities, including Kent County Council, who did nothing."

He did not see much of a future for Manston as a passenger airport – it is already a successful freight terminal – except for shuttle services across the Channel. Cllr Alex King, KCC Cabinet for regeneration, defended the council’s investment in a private sector venture.

"EUjet would not have come to Kent without that £100,000. I do not regret it for one moment. That was an investment that brought an airline to Manston. That airline has demonstrated you can fly those routes. We believe that Kent International Airport has demonstrated its viability over many years as a cargo airport. We believe EUjet, against tremendous difficulties in the aviation world, has demonstrated the potential for Manston as a passenger airport."

Andrew Conquest, a partner with Grant Thornton, said:

"Our intention is to continue to operate the airport while we seek buyers for the business and we are currently reviewing the funding requirements to enable the airport to continue to operate in the short term."

kentonline 3rd Aug 2005

New era dawns at Kent airport

Kent is finally joined by air to the rest of Europe. EUjet’s new low cost services got off to a flying start yesterday when the first flight - a Fokker-100 - took off from Kent International Airport at Manston, at 6.15am for Dublin. It marked the start of a service that is set to boost east Kent and turn Kent at last into an aviation hub. It has already brought 300 new jobs to Thanet and there could be 100 more over the next 18 months.

Flights on day one were 75 per cent full, with more than 600 passengers flying to Amsterdam, Copenhagen, Dublin, Nice and Girona. A smaller number flew back to Manston, reflecting the lack of marketing effort by EUjet at the destination airports. By the end of the year, EUjet will be flying to 22 destinations including Prague, Madrid, Milan, Palma, Malaga, Turin, Edinburgh and Manchester.

Airline and airport bosses were delighted with how smoothly things had gone. P.J.McGoldrick, EUjet chief executive, admitted he had been nervous just before take-off. He has invested millions of pounds of his own money in the venture. But the performance had exceeded his expectations. He said:

“We have had an incredible start to what I believe to be an exciting development, not just for EUjet but also for Kent and this airport.”

Airport staff had turned the aircraft around in 26 minutes. Airport staff also aim to get luggage from aircraft to carrousel within eight minutes of the aircraft’s arrival on the terminal apron.

Kent County Council has invested £100,000 in EUjet. Councillor Alex King, Cabinet Member for Regeneration, said it was a gamble that was well worth taking. September 1 was a turning point that would mark the transition of east Kent from the difficulties of the Eighties and Nineties to a successful economy of the early 21st-century.

“This is the first public demonstration of Kent becoming the Go To county.”

PlaneStation, the airport owner, has invested £3million in preparing KIA for the launch of EUjet. One hundred extra staff have been taken on, including security experts. Alastair Robertson, airport chief, said:

“I would anticipate that we will be employing at least an additional 100 people in the next 12-18 months.”

He added that substantial investment had been made in the latest hi-tec and sensitive x-ray equipment. Councillor Jeff Kirkpatrick, chairman of Thanet Council, welcomed the launch of EUjet:

“It is just a great day for everyone here in Thanet. As a bonus to the residents, we will enjoy the privilege of just being able to pop down here and fly away. Things are really happening and today is the day it takes off for real.”

He added that residents should not be concerned about noise because every step had been taken to minimise it. There was no night flying and EUjet is using “extremely quiet aircraft”. EUjet may be the first airline to use KIA but it is unlikely to be the last. Airport chiefs are in talks with two other airlines interested in operating to other destinations. And charter services to Florida are expected to start next year.

kentonline 1st Sep 2004