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

Storm gathers over airport leak

Council chiefs are demanding urgent talks with ministers after reports that the Government is considering building a new airport for London on the north Kent marshes near Cliffe. According to a report in the Financial Times, Transport Secretary Stephen Byers is weighing up the idea of an airport at Cliffe and the Isle of Grain to cope with additional air traffic over the next 20 years.

The leaders of both Medway and Kent County Council are furious at the prospect. KCC council leader Cllr Sandy Bruce-Lockhart said the reports would inevitably cast a shadow over the development of Manston airport in Thanet and could potentially blight east Kent. He warned that the KCC would resist any plan and argued it was an unrealistic dream. In a letter to Transport Minister John Spellar he complains that Kent should have been told of the plans. It says:

"We place the highest priority on the regeneration of east Kent for which the development of London Manston is the key. Manston . . . is now being taken forward successfully by the private sector both for international freight and for the largest international passenger airplanes. The leak with no supporting evidence about an airport at Cliffe will cause serious blight to the development of Manston, which is now at a critical stage."

The Conservative leader of Medway Council Cllr Rodney Chambers said:

"If there is a need for extra capacity that cannot be accommodated with existing airports serving London there is already a site in Kent. If improvements were made in rail and road communications between London and Manston, especially around Thanet, that would be the appropriate place."

Thanet South MP Dr Steve Ladyman, whose constituency includes Manston, said the report was "poppycock" and he did not expect the plan would come to fruition. The Government is expected to issue a consultation paper in May.

kentonline 8th Mar 2002