Infratil is selling Manston, but wants to buy Stansted. Why?
In March 2012, Infratil announced that Manston was up for sale because it wanted to "refocus its investment profile" and concentrate on retail, production and supplying gas and electricity. What they didn't mention in their press releases was that Manston had lost them money hand over fist ever since they bought it.
In the previous couple of years Infratil had "written down" the value of its two European airports (Manston and Prestwick) from £70m to £36m. These write-downs were simply more realistic estimates of the actual value of the airports, in the light of their performance and the fact that they were losing Infratil about £6m a year.
Don't forget, dear reader, that Infratil is an infrastructure investment company. They buy and sell "big stuff" (putting it technically) to make money for their investors. On their website, Infratil state that "Infratil’s primary goal is to provide its shareholders with a consistent return of 20% per annum over the long term".
Clearly this 20% hadn't happened at Manston, and Infratil realised it wasn't going to happen soon enough to please their investors, if ever. So they decided to cut their losses.
But now we learn that Infratil are joining forces with Morrison & Co (the bank that owns a large chunk of Infratil) and a large pension fund to put in a bid for Stansted Airport. Stansted is owned by BAA, the largest airport operator in Britain, and the Competition Commission ruled some time ago that BAA owned to much of Britain's airport capacity and would have to sell some of it. BAA spent a lot of time and and money fighting this through the courts, but has finally accepted that it will have to sell Stansted.
This makes Stansted a very interesting purchase for a number of reasons. BAA also owns Heathrow, and has spent years carefully managing the mix of flights and carriers at the two airports to avoid them cannibalising each other's customer base. It hasn't been in BAA's interests to have Heathrow and Stansted competing with each other. Clearly, this will change when a new operator takes control of Stansted - there will be a massive increase in competition.
Stansted is well placed to take on new business. Throughout the recent hoo-hah about airport capacity in the south-east, one simple fact has been under-reported - there isn't a shortage of capacity in the south-east. BAA's own chief financial officer was reported as recently as April 2012 saying that Stansted is "only half full".
Both Stansted and Manston have spare capacity, long runways, and are in the "aviation-hungry" south-east. So why would Infratil balk at spending a few million a year at Manston, but leap at the opportunity to invest a BILLION in Stansted? The answer, of course, is in the question - it's the difference between "spending" and "investing". And this is also the answer to those who ask why not Manston.
Manston doesn't feature in any of the serious discussions about the future of aviation in the south-east (and it doesn't feature in Infratil's strategy) for one plain and simple reason - it's in the wrong place. If these two maps don't explain it clearly enough, have a look at this.
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BAA
Reader Comments (12)
And now it fancies Stansted.
As far as I'm aware, Stansted is still in England and a major airport is clearly not a green investment. So, the "why not Manston?" answer that Infratil gave for selling its loss-making airport was just the usual PR bollocks. Infratil is selling Manston because it can't see any way of making it a success. Infratil wants to be part of investing £1bn+ in Stansted 'cos it thinks it'll be a winner.
So, "Why not Manston?" - because even those with access to very deep pockets don't think it's worth spending money on the place. They would rather invest just down the road. I am so frustrated by people hanging wistfully on to the idea that Manston is a viable proposition for a major airport. Please, Infratil, do something useful for the community for once and sell Manston as a plot of land for a different business, one that really CAN create jobs.
Unfortunately, Manston remains as some kind of holy grail to local dreamers who continue to weave unhelpful myth and legends that are in no way rooted in the reality of Manston and the UK aviation industry today.
Thank you for this helpful article and for the two maps which demonstrate conclusively why Infratil are considering Stansted but want to ditch Manston.
Secondly, this is what I find particularly frustrating... The so called pro Manston group continues to bicker about about no night flight campaigners saying how we are against the airport, against the prospect of jobs being created, against Manston airport altogether etc etc. These comments are wrong, wrong, wrong. It is glaringly obvious. I do not think I've heard anyone say they are AGAINST Manston being developed as an airport - it's NIGHT FLIGHTS we do not want. Pure and simple. Gatwick do not have flights during certain times at night. Neither do Heathrow. So why should Manston.
The other thing that gets mentioned is that pro supporters say "well you chose to move near to an airport". Yes - an airport with no night flights or any plans or suggestions that night flights would be proposed. I've got no problem with an airport nearby. Or planes flying over during the day. I quite like looking up and seeing the planes go over. BUT I DON'T FANCY CARGO PLANES GOING OVER ALL NIGHT!!! Simples.
Without getting all Sentimental, we are all residents of Thanet. We obviously all love where we live and want it to be a nice place to be. It should be us against the rest of them - all those who live outside Thanet and put such a negative spin on the area without really knowing much about it.
In short - it will be a shame if Manston closes completely but something needs to be there that WILL generate jobs and money for the area and want people to come into Thanet to visit/stay.
Have a nice day everyone.
Infratil can't sell it on with the aquifer and exisitng pollution.
Yet another massive planning error at TDC.
Why haven't councillors resigned, MacGonigal sacked and the Police called in?
The dual carriage way just built would be redundant, as only the redundant, unemployed and unemployable would want to live near such a place and they would not be able to afford cars. Neither would they be able extract themselves from itv2/3/4 repeats of xfactor, Jeremy Kyle, jeremy Kyle USA, meaning all forms of ground transport in Ramsgate would be pointless. Probably.
The dual carriageway could now be turned into a second runway - and third and fourth, if you take into consideration the other new bit towards Sandwich, and the bit outside old Pfizer, it being equally useless now nobody works there.
The old Pfizer building could be turned into a terminal building, same as Marlowe acadamy after it's closed - you don't need a GCSE in biology to lob a samsonite onto a carousel - and all the buses could stop taking people to Westwood and start ferrying passengers from terminal Marlowe or terminal Pfizer to runways one to four.
Convert Chatham house and Clarendon into catering (aircraft catering) colleges, as modern languages will be pretty useless at an airport where everyone flying in and out will be British.
Close Gatwick, Heathrow and Luton - but not City, got to keep the bankers happy - and build a flyover from Watford to Dartford so the rest of the country does not have to navigate the M25.
EUJet couldn't do it although Plane Station would have us believe they carried 365,000 passengers in their first year with 5 aircraft with 100 seats each & they did only last a year, & two of those aircraft were broken down for the last couple of months, my friend flew to Ireland - only 2 passengers. Another went to Spain - 11 on the aircraft. It also happened to Flybe perhaps you pro guys should be walking round London & surrounding areas with a board on your shoulders.
Stansted is reporting 18m passengers a year in 2011/12, down from a peak of 22m in 2007. The airport has existing capacity for 35m and so that in itself speaks volumes. There is no need to expand Heathrow or look into investing billions in an airport off the coast of Kent - with 18m capacity at Stansted then the government should be working with whoever takes full ownership of the airport to properly incentivise carriers to use the Essex airport. Stansted has fantastic road and rail links and with sympathetic expansion could assist greatly with meeting the much needed demand in the South east for addiitonal airport capacity.