Infratil's flawed bid
Seppuku Lite
As I mentioned recently, before getting revolted by Infratil’s selfishness, the pile of poo they presented to TDC was the carefully considered best efforts of a wealthy, globe-spanning organisation aiming to win support from a strategic partner at a key point in the development of its European operations.
It is a public declaration of commercial weakness; of ongoing and increasing failure; of a flawed business model; of narrow short-termism and strategic poverty.
“All airports across the country are significantly affected by recession”; passengers, freight, airport investment and employment are all down. Like it says in the small print ‘the value of your investments can go down as well as up’. As Newton said ‘what goes up must come down’. As my Gran said ‘all good things must come to an end’. So deal with it.
Guys, having a fixed cost base is nothing special – everyone from the United Nations to my local ice cream van has a fixed cost base. Why bother mentioning it? It in no way entitles you to any special treatment or sympathy.
We all know Manston’s losing some £4 million per year, and that this is unsustainable, and will lead to closure. Top tip: DO NOT BLEAT about your company going down the toilet in a public document. It does not inspire confidence, and puts you in an appalling negotiating position in the event of anyone showing an interest in using your airport.
And what’s this about wanting to be “able to compete equally for new business as shown by the BAWC tender”? As if you couldn’t! At the time of the bid, Infratil had already successfully bounced TDC into giving the all-clear for night flights, and night flights didn’t seem to feature in BAWC’s decision-making process:
Jude Winstanley, BAWC's head of network and freighters, said: “After careful evaluation and taking into account a number of factors including the need to provide the best product for our customers, cost effectiveness, service quality and speed of connection, Stansted remains the most attractive long haul freighter base for BA World Cargo and our customers.” Air Cargo News, 13th March 2009
Manston lost out to Stansted on at least FOUR key considerations, and night flying wasn’t even mentioned. The competition was unequal only inasmuch as Manston was a crappier proposition for BAWC.
In an earlier post, I pointed out that Infratil made Manston’s under-usage a selling point: lack of congestion, competitively priced aircraft parking, etc. There are at least two major problems with this: first, idle is good vs busy is bad isn't a great starting point for a business model; second, when all the other recession-hit airports are less congested anyway, you suddenly lose your selling point.
Infratil are labouring under the impression that they are competing for low cost passenger and long haul freight with Gatwick and Stansted. (Duh! Heathrow, London City, Lydd and Southend: recession-hit airports, just like Manston, and all hungry for business. Manston’s business would do fine. Ignoring them won’t make them go away.) Infratil are trying to hit the big time in a high volume, commoditised market, setting off from well behind the starting line in the toughest market for decades. I wouldn't start from here, guys. Strategically, making a selling point of lack of custom, whilst aiming for a high volume, low margin market sector is a rather messy form of suicide.
Freight, MasterPlan, Matt Clarke, Stansted Infratil, Manston, Night flights, TDC
Reader Comments (3)
Loathe as I am to admit it, you're spot on with this analysis.
I work at the airport. Not in the Management-Suite though.
Infratil is an appalling company to have as a neighbour. They have failed to work effectively with the Consultative Committee. The latest shenanigans is just an example of this. They've presented this load of horse-sh*t to TDC just after a meeting of the Consultative Committee. At that meeting they made no mention of their plans for unlimited night-flying. Local community representative weren't able to tell Infratil what they thought because they weren't asked. As with their previous attempt to get night-flying extended, they are working in cahoots with TDC to bypass the Consultative Committee.
It hasn't gone unnoticed that their much-vaunted Master Plan makes no mention of the need for unlimited night-flying. With the current emphasis we are left to wonder if we can believe a single word of what they have presented. Wha's the point of a Master plan if it bears no relation to what you really want to do?
They say that they want a passenger airport, but everything they do appears to be geared around developing a horrible noisy, poluting freight airport with no nett benefit to the local community.
When Infratil bought the airport, they knew that the flight paths passed across housing and they knew that there were legal restrictions on night-flying. If they wanted a 24 hour freight airport they should have bought a different one.
Anon 2:23 - thank you and congratulations for peeping over the parapet. Soon I'll be doing a post along the lines of "if you owned Manston, wtf would you do to make it work". I look forward to your comments on that one. Get your colleagues to chip in too.