Game-changer - Manston to stop being an airport

Manston and Prestwick have proved hard to sell. Unsurprisingly. Infratil wants to sell them because they're failures - and that's why they're hard to sell.

Infratil has been losing millions every year, for years, and they're eager to staunch the flow. The penny seems to have dropped that these two failed airports would be easier to sell... if they weren't airports.

So Infratil is putting the word out that they're prepared to stump up cash to help potential buyers transform the airports into, er, something they actually want to buy.

Do feel free to use the comments section to pass on any helpful suggestions for Manton's future... theme park... solar farm... race track... nature reserve...

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KLM-Manston: news reports

Reports from the national and local press, and a couple of interesting takes on the story from the trade press.

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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". 

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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

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.

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Rival group enters battle for Stansted airport

A consortium led by an Australasian investment manager has emerged as an early rival to Manchester Airports Group in the £1bn battle for Stansted airport.

Morrison & Co, which operates out of New Zealand, Australia and Hong Kong, is heading a bid team that also includes the New Zealand Superannuation Fund and Infratil, a Wellington-based infrastructure investor.

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Night Flights vote - press coverage

Vote against Manston Airport night flights plan

BBC 25th May 2012

Plans for night flights from Manston Airport in Kent have been opposed by Thanet District Council. At a meeting on Thursday, the Labour-controlled council voted against all night flights to or from the airport. Charles Buchanan, the airport's chief executive, said:

"We are disappointed the council is not supporting the airport as much as it could."

In March, owners Infratil announced plans to sell Manston and Glasgow's Prestwick Airport.

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Airport CEOs upbeat

Two minds with but a single thought

Iain Cochrane, chief executive of Glasgow Prestwick Airport:

I believe this is an excellent opportunity for us to attract new investment into the airport to provide the stimulus for future growth.

STV 8th March 2012

Charles Buchanan, chief executive of Manston Airport:

This represents an opportunity for Manston to ... attract new investment into the airport and stimulate the growth needed to make it a success in the future.

kentonline 8th March 2012

Man moves house, Manston issues press release

This seems to be another fine example of PR puffery in action. It appears that Mr McQuarrie was already "Group Manager Freight Development for both airports" - so it's unclear what he'll be doing that wasn't already in his job description. The only bit of news appears to be that is moving house from Scotland to Margate. Rather poignantly, he is another employee who tries to play up Manston's lack of business as an advantage: "no congestion".

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Manston Airport’s ability to attract freight operators has been given a boost with the appointment of an experienced freight development manager - Allan McQuarrie, 46, joined Infratil in 2007 and until recently, has been based at their airport in Prestwick, Glasgow.

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Infratil selling Prestwick... Manston next?

This has been on the cards for a couple of months now. Infratil has been under increasing pressure from major share-holders in New Zealand to stop wasting time and money on the wrong side of the world.

Struggling Prestwick is almost completely dependent on a single commercially ruthless customer - a foolish and vulnerable position to have got into. When 98% of your business comes from one customer, that customer can call the shots - you've lost control of your business.

Barely struggling Manston has developed a pattern of attracting flakey customers, and has now stumbled, flat-footed, into the glare of international disapproval as a result of some particularly foolish greed.

It's not surprising that the Kiwis should want to crystallise their losses, and get home. TDC would then, of course, have to rifle through Brian White's old filing cabinets looking for a very slim folder labelled "Plan B".

The time and effort spent fussing over Manston's life support sysytem would be far better spent researching and launching a viable and sustainable "economic and social engine".

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Desperate times call for desperate customers

In the glare of the floodlights at a remote Home Counties ­airfield the crew of an Iran Air passenger jet set about a discreet spot of sanctions ­busting. The bizarre sight of the Tehran-bound plane has become a regular event as it refuels at one of the UK’s smallest airports so the scheduled flight can return to Iran.

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Psst! Want to buy an airport?

CEO confirms: Prestwick for the chop

Well, Dear Reader, you can tell your grandchildren that you read it here before you read it on Bloomberg!

Infratil's Supreme Commander has gone on record in an interview with Bloomberg telling the world that Prestwick doesn't have a long-term future in Infratil's portfolio, because it "isn't performing".

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Glasgow kiss-off

Prestwick Airport passenger numbers fall

Prestwick Airport saw a drop of nearly 20% in passenger numbers in July, compared with the same month last year. Infratil, the Ayrshire airport's owners said there were 37,800 fewer passengers during the crucial first month of the school summer holidays.

New Zealand-based Infratil said the July passenger numbers fell from 194,500 last year to 156,700 this year. In recent years, the number of passengers at Prestwick topped 230,000 during the month in both 2007 and 2008.

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Is it true that every 1 million passengers creates 1,000 jobs?

Far from it. You’ve only got to look at airports that have the kind of passenger business that Manston hopes for to see the truth:

Bristol – 439 jobs per million passengers.

Bournemouth – 408 jobs per million passengers now, and expected to fall to 247 by 2015

Prestwick (another Infratil airport) – 248 jobs per million passengers, and that was before the last two rounds of redundancies.

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Surely we can trust Infratil’s numbers?

Infratil (who own Manston) also own Prestwick Airport near Glasgow. In autumn 2008 Infratil’s forecast for passenger numbers at Prestwick was 5.7 million by 2018 and 12 million by 2033...

Almost immediately, freight and passenger business plummeted, and Prestwick ran at a loss for the rest of the year. Shortly after that, 50 staff lost their job. By autumn 2010, passenger business had fallen so much that another 120 staff had been made redundant... so much for Infratil’s forecasts.

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Prestwick: Coming to the end of the runway?

Prestwick Airport in Scotland (some way outside Glasgow) is owned by Infratil, the company that owns Manston. Infratil's "vision" for Manston's future is pretty much where Prestwick is now - some freight, and a lot of passengers travelling on budget airlines. Some people just don't learn...

Prestwick Airport has always stuck with its "Pure Dead Brilliant" moniker, despite the outcry from squirming west coasters when it was adopted five years ago. But if you were asked to come up with an accurate description of the airport at present, those of a cruel disposition might be tempted just to omit the last word.

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Manston keeps failing. What next?

Controlled descent...

Infratil bought Manston for £17 million and are happy to spend £10-20 million on it before pulling the plug, so from their point of view KIA is small but far from trivial. Infratil's European airport investments are performing poorly. Infratil are big enough to take the hit by cross-subsidising, but not indefinitely.

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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.

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