No sign of Prestwick airport sale

The New Zealand company which owns Prestwick has said there is no sign of a buyer for the airport, and its value has fallen. Infratil put its two UK airports, which include Kent, up for sale in March this year.

However it said the sales process for both had been "unsuccessful to date". As a result, Infratil said it had taken an impairment charge of £22m, which now values Prestwick at about £14.3m and Kent at £7.6m. Infratil said that it would "continue to seek a buyer for the airports and work with local stakeholders to review alternatives". 

Together Prestwick and Kent's Manston Airport recorded losses for the six months to the end of September of just over £2m. Passengers travelling through the airports fell by more than 180,000 during the period compared to the same time in 2011, although freight business increased.

Prestwick airport has had several owners in recent years. In 1991 the newly-privatised British Airports Authority, BAA, put it on the market. In 1992 the airport was bought by Canadian businessman Matthew Hudson. He sold it in 1998 to transport group, Stagecoach. Stagecoach then sold it to Infratil in 2001 for £33.4m.

A significant percentage of the airport's aviation revenue is derived from freight and other aircraft activity, with business and property income also playing a significant role.

bbc.co.uk 13th Nov 2012

Charles Buchanan's brave face

Every now and then Charles Buchanan reports to KIACC (the airport's consultative committee).

These reports are usually a rattling good read, if only to pick out the bits where a favourable gloss is put on the less than lovely truth.

The airport sale seems to be in the doldrums. The Olympics were a wash-out, although some planes parked at Manston. Posh people's planes.

If they happen, KLM flights would be leaving at about 6am, according to Charles. Of course, the problem with that is that they would still count as scheduled night flights, in breach of the S106.

Passenger numbers have fallen to the point where it's almost a personalised air taxi service. Cargo remains at the same level it's been for years.

Nonetheless, through thick and thin, Manston is "very committed to working with our local community", providing raffle prizes for local charity quiz nights and so on.

"discussions have not progressed as quickly as had been anticipated" - Charles Buchanan, reporting.

"the war situation has developed not necessarily to Japan's advantage" - Emperor Hirohito, surrendering.

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KIACC Report Oct 2012

BBC Radio Kent airport debate in Rochester

BBC Radio Kent is hosting a debate on airport expansion.

A panel will come together at Cliffe Memorial Hall near Rochester on 30th October with doors opening at 18:00 GMT.

The panellists will be:

• Daniel Moylan, the Mayor of London's Aviation Advisor
• Councillor Alan Jarrett, Deputy Leader of Medway Council
• John Grant, Executive Vice President of aviation experts, OAG
• Charles Buchanan, Chief Executive, Manston Airport
• Sue Armstrong-Brown, Head of Conservation Science at the RSPB
• Clive Lawrence from Demand Regeneration in North Kent

If you would like to be in the audience, you can request tickets by emailing radio.kent@bbc.co.uk or writing to: BBC Radio Kent, The Great Hall, Mount Pleasant Road, Tunbridge Wells, TN1 1QQ.

Admission is by ticket only. Tickets are free but are limited to a maximum of two per person and will be allocated on a first-come first-served basis. Applications for tickets close on 19 October.

Infratil Airports Europe; right ingredients wrong outcome

Infratil's assessment of their European airports, in their own words...

In the 1990s Australia and New Zealand were amongst the first countries to sell state-owned airports and to allow their commercial operation. The resulting value uplift encouraged Australasian investors to look at markets where similar developments were occurring, which led to Europe.

Infratil invested in Prestwick, Kent and Lübeck airports and purchased an option over an airport near Berlin. These airports were acquired at well below replacement cost as rapid growth in European air travel made it likely that their capacity would soon become needed and valuable.

Kent for instance cost less than £20 million and the next London runway will cost over £2 billion (Mayor Boris Johnson’s preferred site in the Thames Estuary is likely to cost over £20 billion).

Notwithstanding this enormous potential, Infratil has now called it quits. European air traffic growth has slowed so that the need for additional airfield capacity is postponed, and Infratil’s assessment of the relative benefits of waiting (and continuing to meet operating cost) versus refocussing elsewhere have favoured exit.

Infratil Update September 2012

All aboard the 4.20am flight to Amsterdam?

Let's have a quick look at the latest exciting news to come from Manston airport. The suggestion is that KLM's decision as whether or not to run a twice a day service between Manton and Schipol will be influenced (but not decided) by the response to Manston's online survey.

• Charles Buchanan says that KLM would have a plane parked at Manston overnight, ready to fly to Schipol each morning.
• Charles Buchanan has often said that planes only make money when they are in the air, so it follows that KLM would want their "Manston" plane back in Schipol bright and early so that it has plenty of working (flying) hours ahead of it through the rest of the day.
• Schipol Airport is effectively closed between 10pm and 6am, and Amsterdam is one hour ahead of us (at the moment).
• The flight time from Manston to Schipol would be about 40 minutes.
• To arrive in Schipol at 6am (local time), KLM's "Manston" plane would have to leave at 4.20am (local time).
• The online questionnaire doesn't ask what time of day people would like to fly - now you know why.
• The online questionnaire doesn't ask how much people would be prepared to pay for their flight.

As influential local commentator Maurice Byford has pointed out:

Any business worth its salt would carry out due diligence, population and traffic analysis and SWOT analysis without resorting to a survey. You might want to ask, how many people travel to Europe from Kent, but then you need only look at the traffic figures from EuroStar train from to see the passenger footfall for Belgium.

There are plenty of reputable consultancies that specialise in providing detailed economic and demographic analyses to help businesses make rational commercial decisions. They have access to all the available data on business activities, income distribution and socio-economic groupings by post code. They have a pretty good idea how many people run businesses with European interests, and how many people are likely to take weekend jaunts to the Continent or connect to long-haul flights.

It is very likely that KLM have already done their homework, which is why they were looking for £600,000 of public money to underwrite the risk of operating from Manston. The online survey doesn't cover two of the questions that KLM most clearly need answered - how much will people pay, and how willing are they to accept KLM's offering (i.e. first thing and last thing, and nothing in between).

Airlines are high investment, high throughput, low margin businesses. They employ people full-time to examine every available business opportunity, and re-examine each option every couple of years. All of the major airlines will have examined and re-examined Manston over the years it has been owned by Infratil. With the exception of FlyBe's tentative experiment with a couple of minor routes (which failed for lack of passengers), there have been no takers.

KLM's interest in Manston may simply be that it is cheaper to park a plane there than at Schipol, and there's the possibility that the passenger fares would exceed the fuel costs to Schipol. In all probability, KLM will discover what others have discovered before them - Manston's catchment area cannot support a successful passenger or freight airport. It doesn't matter how keen the local residents or the local businesses are - there simple aren't enough of them.

After years of fanciful forecasts, missed targets and false hopes, this may be Infratil's legacy - a minimal passenger service that only ever flies at night, while the airport is almost entirely idle through the 16 hours of daytime. This is Infratil waving goodbye, with two fingers.

Fan mail

You are so backward sorry

I live in Ramsgate & am on the flight path. I have no problem with flights between 6am & midnight. I am on the approach & realise that for the future we need to allow Manston to expand a bit. So if a fire station or Ambulance station was to open near you would you complain about the sirens at 3am???? Perhaps if I was your neighbour & you had to have an ambulance at 3am I would stop it due to the noise from the sirens.

Your

Alun

Cheers, Alun - you're a pal.