SOUTHEND 5
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Stobart woes
The reduction in based aircraft and overall flights is having a severe effect on the Stobart share price. Stobart shares closed at £1 yesterday, a huge fall from the £1.55 earlier in the year when the markets believed the 2m pax predictions. Now that the news is out there that pax numbers will be below 1m, the market is voting with its feet. It doesn't help the Stobart cause that the directors are proposing to move from incentive based pay to huge fixed salaries at a time when performance is poor.
On the upside there is no need for further investment at Southend so the shocking performance of the share price (which will limit Stobart's ability to raise capital) will have little effect down South. I suspect however that the group might reconsider the timing of the Carlisle redevelopment.
We will know more about the results at SEN when the interim group results are published week after next.
On the upside there is no need for further investment at Southend so the shocking performance of the share price (which will limit Stobart's ability to raise capital) will have little effect down South. I suspect however that the group might reconsider the timing of the Carlisle redevelopment.
We will know more about the results at SEN when the interim group results are published week after next.
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You'd think Jota would have the website ready to be updated as soon as the AOC was issued. They need to get out there now and sell sell sell as I suspect the delay in introduction has cost them in crews sitting around.
Lets hope Jota can pick up where Titan left off with ad-hoc 146/RJ ops.
Lets hope Jota can pick up where Titan left off with ad-hoc 146/RJ ops.
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To be fair to Stobart, most shares are having a torrid time at the moment.
e.g. BP have lost £1 from their recent peak.
What I'm wondering is how much the company value is affected by the fact that a large chunk of their investment has gone into something they don't own - i.e the airport itself. They may have the benefit of their investment for several years but a lot of money has gone into improving somebody else's property.
e.g. BP have lost £1 from their recent peak.
What I'm wondering is how much the company value is affected by the fact that a large chunk of their investment has gone into something they don't own - i.e the airport itself. They may have the benefit of their investment for several years but a lot of money has gone into improving somebody else's property.
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London Southend Airport - Wikipedia, the free encyclopedia
http://www.southendairport.com/stobart-group/
Now I am confused. So how long is the lease?
Edit
http://www.southend.gov.uk/info/2001...uthend_airport
What is freehold?
So what does Stobart actually own at Southend? Strange that they think they own the airport
In 1993, after the airport had been making losses for many years, Southend Borough Council sold the airport to Regional Airports Ltd
Stobart Group owns and operates London Southend Airport and Carlisle Lake District Airport where passenger growth is the focus
Now I am confused. So how long is the lease?
Edit
http://www.southend.gov.uk/info/2001...uthend_airport
Southend Council owns the freehold of the airport, but it has been leased since 1994 to London Southend Airport Company Limited, which is now a subsidiary of the Stobart Group.
If you own the freehold, it means that you own the building and the land it stands on outright, in perpetuity. ”
Last edited by LTNman; 11th Oct 2014 at 21:54.
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Southend Council/Stobart
I thought that Southend Council retained ownership of the airport and Stobart had signed a 125 year lease. May be wrong of course, but that's my understanding of the situation.
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The council granted LSACL a 154 year lease in 1994. The company was purchased by Stobarts in 2008 so as of today they still enjoy 134 years of the lease. The rent in minimal but they do have repair and upkeep obligations and a duty to share any profits from airport operations (which isn't a problem at the moment as there aren't any profits). Overall I think the lease terms are not the reason for £180m being wiped off the company's valuation. The lack of any profit on a £100m+ investment in the airport is the likely cause and the confirmation that pax numbers will go down and not up over the next 12-15 months has worried investors.
asdf1234
I haven't seen any "confirmation that pax numbers will go down and not up over the next 12-15 months". All I recall is Stobart saying a while ago that they expected numbers to be generally flat in the immediate future but that they anticipated continued growth over the next 12 months. I wouldn't rule out a positive announcement in the next week or two which, incidentally, is when Stobart release their interim trading statement.
As you say Stobart have a fully-repairing lease of about 134 years which means the full value of the airport is to their benefit: only when a lease has less than about 80 years to run does its value to the leaseholder decline over time.
There are a number of reasons for the decline in their share price including the fact that they sold 49% of the core road transport operation, so SEN's performance at this stage probably doesn't have much effect in itself one way or the other.
As LTNman says, the Jota 146 will have a negligible effect on SEN revenues but it is still good news to see them expanding.
I haven't seen any "confirmation that pax numbers will go down and not up over the next 12-15 months". All I recall is Stobart saying a while ago that they expected numbers to be generally flat in the immediate future but that they anticipated continued growth over the next 12 months. I wouldn't rule out a positive announcement in the next week or two which, incidentally, is when Stobart release their interim trading statement.
As you say Stobart have a fully-repairing lease of about 134 years which means the full value of the airport is to their benefit: only when a lease has less than about 80 years to run does its value to the leaseholder decline over time.
There are a number of reasons for the decline in their share price including the fact that they sold 49% of the core road transport operation, so SEN's performance at this stage probably doesn't have much effect in itself one way or the other.
As LTNman says, the Jota 146 will have a negligible effect on SEN revenues but it is still good news to see them expanding.
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If you have less based aircraft flying less routes in Summer 2015 you will have less passengers going through the terminal. There is no indication that the shortfall is being replaced by new carriers so right now the fact is that pax numbers will go down over the next 12-15 months. Markets like facts, not rumour, hopes or aspirations and the market's view of Stobart is that it was £180m overvalued. Given that the other parts of the group were predicted to perform well and the airport not so well, I think the lack of any meaningful return in the £100m+ investment in the airport is driving the share price down.
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So, just a general question to all. Does anyone think any new carriers will dip their toe in the water and give SEN a try? Naturally, we have Skyworks kicking off in a few weeks, but from what I keep reading there appears to be some concern regarding the DUB route (or is that just related to through pax to the U.S.?).
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I must agree. News must have spread to shareholder's that Easyjet are reducing their destinations from SEN. This surely was not foreseen by Stobarts management. I have never understood why the Krakow route was dropped, or why the Edinburgh and Belfast routes were not taken up by another carrier. It will be interesting to see if all the Stobart Air routes from SEN continue, and if new ones are found. Shareholders want to see growth and there is none proven for SEN for the next 12/15 months.
Why are Air Malta not operating holiday flights like they used to with B737-200s? Twice a week all the year round would be well supported I am sure, although I am aware it would probably be charter flights through a tour operator and not necessarily scheduled flights.
Why are Air Malta not operating holiday flights like they used to with B737-200s? Twice a week all the year round would be well supported I am sure, although I am aware it would probably be charter flights through a tour operator and not necessarily scheduled flights.
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It does seem a little odd why more carriers haven't adopted SEN. There does seem to be a positive atmosphere about announcements soon, but that may well be wishful thinking. Only 3 or 4 of Stobart Air's six European routes will survive, I think, but there's plenty of opportunity to try more. EDI and BFS should be successful, but there must be some kind of block from EZY or flyBE or something.....
Air Malta's A319s should be a shoo-in for SEN. Surely Stobart have engaged in serious conversations with them?
I just hope they are spending some cash on their market research as well as on trying to tempt airlines to SEN.
Air Malta's A319s should be a shoo-in for SEN. Surely Stobart have engaged in serious conversations with them?
I just hope they are spending some cash on their market research as well as on trying to tempt airlines to SEN.
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The comments on the Dublin route sound logical in terms of where it is going etc. However, while Stobart Air will offer a service on the route albeit in the different guises of Aer Lingus and Flybe, from the perspective of the travelling public who would be booking this route, one airline is ending it and another taking it up. Hence, many who want to fly return will not do so with EIR as they may have no flights back.
The numbers have been quite positive on the route, though few of us on here will be able to comment on the commerciality as we cannot see the revenues, but the passenger numbers as an isolated indicator look promising. Dublin will be a good test in the Flybe guise and I suspect its success with Flybe will be the barometer that they measure the the domestics by. The interlining with EI for the T/A flights will give it another bonus. I contend that if SEN DUB works satisfactorily we will see BE on SEN EDI, potentially GLA and even potentially BHD.
It is early days to judge the success of the airport, factors potentially greater than SEN has control over are at play in the easyJet rate of growth. However, on the plus side it would appear that the easyJet routes are well subscribed. The other airlines who would be happy to get into a easyJet base alongside easyJet like Wizz, Norwegian or even Ryanair are well and truly sewn up at other London airports. Wizz won't test anything other than LTN as moving any routes would immediately see FR jump into their existing LTN route. However, nothing to stop any of them trying though FR and DY precluded from using SEN largely due to the ac type.
SEN's scope of operator is limited given the ability to handle greater than airbus 319/20. Reduces the pool to choose from or be chosen by.
Flybe is the vehicle/brand that can bring about significant growth/ change at the airport on a sustainable, I think we will see good growth on the Dublin route in the form of BE, and then we should see the other domestics being considered....
The numbers have been quite positive on the route, though few of us on here will be able to comment on the commerciality as we cannot see the revenues, but the passenger numbers as an isolated indicator look promising. Dublin will be a good test in the Flybe guise and I suspect its success with Flybe will be the barometer that they measure the the domestics by. The interlining with EI for the T/A flights will give it another bonus. I contend that if SEN DUB works satisfactorily we will see BE on SEN EDI, potentially GLA and even potentially BHD.
It is early days to judge the success of the airport, factors potentially greater than SEN has control over are at play in the easyJet rate of growth. However, on the plus side it would appear that the easyJet routes are well subscribed. The other airlines who would be happy to get into a easyJet base alongside easyJet like Wizz, Norwegian or even Ryanair are well and truly sewn up at other London airports. Wizz won't test anything other than LTN as moving any routes would immediately see FR jump into their existing LTN route. However, nothing to stop any of them trying though FR and DY precluded from using SEN largely due to the ac type.
SEN's scope of operator is limited given the ability to handle greater than airbus 319/20. Reduces the pool to choose from or be chosen by.
Flybe is the vehicle/brand that can bring about significant growth/ change at the airport on a sustainable, I think we will see good growth on the Dublin route in the form of BE, and then we should see the other domestics being considered....
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People say that just because BFS and EDI managed x pax on EZY, that number doesn't translate to successful operations on a smaller aircraft because the economics are different.
While that may be true, there is a case study in NQY in which it would appear high load factors were achieved. On that basis, I am fairly confident that domestics could be attempted successfully
While that may be true, there is a case study in NQY in which it would appear high load factors were achieved. On that basis, I am fairly confident that domestics could be attempted successfully
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Sen-Dub
I can speak from personal experience regarding the Sen/Dub route. A family member was booked on the Sen flight to Dub on Wednesday the 8th with an onward connection to Chicago. She was notified that the Sen/Dub flight was cancelled and opted to travel out on Friday 10th, only to be advised on Thursday that that flight was also cxd.
Stobarts offered transport to LGW departing Sen at 0630 on Friday, however the coach did not leave until 0650 consequently she arrived too late for her flight.
As she was booked on an Aer Lingus flight to Chicago that afternoon she had to get a taxi to Lhr to make the connection.
A total shambles from start to finish.
I am ex employee of Sen and support its development 100%, but it's hard to endorse it when it offers such an appalling standard of service.
Stobarts offered transport to LGW departing Sen at 0630 on Friday, however the coach did not leave until 0650 consequently she arrived too late for her flight.
As she was booked on an Aer Lingus flight to Chicago that afternoon she had to get a taxi to Lhr to make the connection.
A total shambles from start to finish.
I am ex employee of Sen and support its development 100%, but it's hard to endorse it when it offers such an appalling standard of service.
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Ideal arrangement for SEN DUB would be the selling of seats on both BE and EI websites under different flight codes.... for a limited period of time anyway, that would have ensure from a consumer perspective, continuity of service....
EI-BUD
EI-BUD
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Oh and by the way don't bother to complain to Stobart Air they blame the airport, and if you complain to the airport they wash their hands and suggest you complain to Stobart Air.