STANCHESTER AIRPORT: A Marriage Made In Essex!
Greetings PPRuNeR's!
I have resisted commenting on the grand acquisition announcement until now. And with good reason. I did not wish to write - in haste - a string of naughty words which would likely get me banned from here. Also, my * button is virtually worn out due to copious overuse elsewhere. And, having slept on the news, I find that the pool of blood from my slashed wrists is at last beginning to congeal. Computer keyboards and fluids just don't mix well. Thus, the time has come to (briefly) set aside the vimto and comfort food in public consideration of the prospects for this awkward marriage.
The MAG deal for Stansted is fantastic news! The MAG deal for Stansted is terrible news! In fact, both statements are quite correct. From a Stansted Airport perspective the deal is fantastic news. But from a Manchester Airport perspective the deal is an unmitigated calamity. East Midlands and Bournemouth Airports have plenty at stake too; this doesn't look good for them.
So this is a deal of winners and losers. For some elation, for others despair. It all depends on where you are standing and what factors best serve your personal agenda.
Being a secretive soul, there is much I haven't told you folks about myself. Foremost amongst the information withheld until now is the fact that I am not actually a human being. I am in reality the progenitor of an entirely new species - the Greater Ten-Toed Sloth [Slothus Mancunianus] - a creature with remarkable abilities to survive for long periods on only vimto and chocolate, and to forecast the future. Thus armed with the two key essentials of life, I shall set forth for you some of the consequences of this deal, exclusively revealing some of the key winners and losers as we go forward.
And, of course, heading the list, the biggest winner of all is our good friend MR MICHAEL O' LEARY. Whilst he is not noted for unrestrained spending on his staff, I do suspect that it will be champagne and crisps all round when he sets foot in Ryanair Towers on Monday morning. His life just got a whole lot easier in so many ways. And not just because Man City won again (astute man of good taste is our Michael). Multiple problems resolved at a stroke! Unbelievable maybe ... but it turns out that the turkeys really did vote for an early Christmas!
Just look at things from MOL's point of view. In the past, whenever he wanted to ensure ultra-cheap charges from the Stansted bods he had to disrupt operations at his own largest base ... pulling out planes, dropping routes ... pain now for gain later. Inconvenient, but necessary. Now that problem is resolved. Need to make a point to keep costs low at STN? But don't want to disrupt your biggest base operation? No problem! Just pull a bunch of planes out of MAN, EMA and BOH. It hurts the turkeys in the same wallet, but inconveniences just afew of Ryanair's regional ops rather than the main London base. Bargain! And you just know MAG'll have to bend over in the end. They're not very financially astute after all ... if there was any doubt before, paying one and a half bill GBP for STN has dispelled it. And each time you need a concession, Michael, just rinse and repeat. The beauty is the simplicity of it all. You get what you want and don't have to mess up the Stansted operation any more. What's not to like? No wonder the PPRuNe Stansted fanboys are elated! MAN, EMA and BOH will be completely screw ... I mean mightily inconvenienced ... but that is MAG's problem isn't it?
Just think about your future discussions with MAG, Michael. You'll be like the cocky Tomcat 'negotiating' with a wounded pigeon ... how your mouth must be watering! I'll bet you can't wait! Deep fried pigeon for dinner tonight!
But hold on ... could the introduction of MAG's extraordinary team of experts attract a raft of new competition to Stansted? After all, MAG must believe that STN's previous management were a bunch of numpties ... they will be able to do so much better with the introduction of their negotiating genius. The very same genius which knocked the STN price-tag down to a bargain 1.5 Bill! Competitors will surely be flocking into the STN honeypot based purely upon MAG's astounding marketing skills ... well no other factor has changed, has it?
I can just see the letters now:
Dear Air France / KLM,
MAG here. Your mates from Northern England. Remember us? That's right ... we're the guys who issue "No Diversions" NOTAM's just when you need us. Anyway, we've got this fantastic proposition for you. Why not fly from our shiny new airport at Stansted? Yes, its pretty close to the Channel Tunnel but don't let that put you off. And OK, its true that the most ruthless LCC in the world dominates the slots here and they've vowed to crush you into the deepest depths of Hell. But set against that the fact that we can offer you really low fees and a catchment area of afew folks who don't like trains or LHR ... it has to be a winner? Come and talk to us!
Love, MAG.
Dear Latehansa Group,
Is that name spelt correctly? There is a guy in the office here who tells us that is how you spell your name. Please come and fly from our shiny new airport at Stansted. It's really great, and the new MAG management team here is really talented ... we're financial whizzkids. Picked up Stansted for just 1.5 Bill. We're genii ... not like the last lot at all. They were so stupid they sold this jewel-in-the-crown airport for just 1.5 Bill. How we sniggered when their negotiators left the room! We robbed 'em! But anyway, back to the point. Come and fly your planes from Stansted. Apparently, there is a small number of passengers who would consider flying from here to Germany, Belgium, Switzerland and Austria with you. All you have to do is undercut Ruinair who have pledged a price war to cast you into the hottest fires of Mordor if you set so much as one tyre down on the runway they call their own. It's an unmissable opportunity. Call us!
Love, MAG.
Dear American Airlines,
Please fly from our shiny new airport at Stansted. It's run by MAG now, not that bunch of idiots who used to run it. They were so stupid we fooled 'em into selling cheap! Just 1.5 Bill. And that's Pounds, mate, not your cheapo Dollars, oh no! Anyway, now that we're in charge everything here is different. Remember how there were so few premium pax at STN when you tried here last time? Well, we believe that hanging the name "MAG" over the door will change all that for you! The punters will flood in. I know that you said you're now heavily invested with your partner Cockney Airways at Hounslow ... but hey, that's on the other side of London. So come on. Give us another go!
Love, MAG.
Dear Emirates,
Your mates at MAG here. We know that you fly frequently from two London airports already, but we were just wondering ... ? Err ... OK ... but we could do you a really great deal. I mean, say we let you fly in for free? What percentage of overall costs on a premium long-haul scheduled service do our airport user charges represent ... must be a MASSIVE saving for you, eh? Come on ... you know you want to!
Love, MAG.
Dear E t i h a d,
MAG here. Awfully sorry about hacking off your Abu Dhabi pals by snubbing their outstanding offer of investment in favour of an Australian Private Equity Fund. And after all you'd done for the Manchester area as well. But hey ... that's how the cookie crumbles! So anyway, we've got this amazing proposition for you ...
Love, MAG.
Dear DHL & UPS,
MAG here. We've just bought a fantastic airport in Essex called Stansted. Not on the M1, but it's really brill. We'd love you to move your UK operations to it. It's a bit of a cargo specialist, you know ... bound to be better than the rubbish place you use at the moment. Where's that again? Oh ... hold on a minute ... just forget all that! As you were. Have a nice day!
Love, MAG.
Dear Gatwick / Luton based IT Charter Behemoth,
Whilst we realise that you have massive fixed infrastructure investment in place at your current London bases which are perfectly located for your affluent South East customer base, we'd like you to consider a change ...
And you'd be head to head with Ruinair who have pledged to murder you and feed your rotting carcass to rabid dogs! Call us!
Love, MAG.
So, Mr O' Leary ... it looks like you are the big winner. But who else comes up smelling of roses? Well, Heathrow Holdings [BAA]. GBP1.5 Billion! What a deal. Who was your chief negotiator? Give that man a Knighthood! MAG ... hire him ... please! If he can be persuaded to work for a company that just blew 1.5 Bill!
Any other winners? Tough one.
So who loses out, then?
Well, for starters all those ratepayers residing in the ten boroughs which comprise Greater Manchester. Councillors ... don't you just love 'em? Instant experts on all topics ... civic pride to the fore ... pompous soundbites their stock-in-trade! And how the spokespeople for Greater Manchester's councils have welcomed this deal. "The acquisition of Stansted will help us to deliver maximum value for Manchester Council and the other local authority shareholders," says Sir Richard, knowingly. "This represents a good deal for local authority shareholders," says Lord Peter (who clearly recognises that STN is a mere snip at just GBP1.5 Billion). Nice words, chaps. Just one question, though. How are your plans for the post-airport dividend era progressing? You know, the bit where the money stops flowing in? It'll affect you a bit like the government cuts!
What about the other airports ... MAN, EMA and BOH. Big infrastructure investments required? Dream on! Poor Manchester ... not the main focus now, eh? Which brings us to another little conundrum.
Surely MAG - Manchester Airports Group - sounds far too parochial for this newly aggrandised organisation? A name change is in order! Hire expensive consultants to devise a new corporate image right now ... what's afew million to get something this important right? Some suggestions from me, though, to get the ball rolling. How about DEBTSLAVE GLOBAL CONCEPTS ... nicely descriptive and has a certain ring to it, don't you think? Or maybe HUBRIS HOLDINGS, reflecting the diversity of your portfolio? Or perhaps you would favour the new more eclectic type of name popularised by newcomers such as Moonpig and Red Spotted Hanky. I suggest WOUNDED PIGEON GROUP to reflect your status in the eyes of your largest customer.
What is the upside for Manchester Airport ... this is the Manchester thread, after all. Well, not much that I can see. Infrastructure investment limitations on the airport site itself (as opposed to Airport City office blocks) ... long-term debt concerns? Please reassure me if you can!
At least Manchester Airport itself will always be an asset with intrinsic value. Even if MAG withers in a future of higher interest rates, a falling pound, recession and debt service concerns, someone somewhere will always want the core asset. Maybe an investor from China, India or the UAE. The airport will still be here, waiting.
We may face a five year financial 'nuclear winter' in the meantime, but the airport will still be here. Doing its job. Sidelined. Underloved. Neglected. Unappreciated. Awaiting the heroes of a new era to restore the squandered legacy of the great Sir Gil Thompson and his predecessors.
Yesterday's announcement is comfortably the worst commercial news affecting Manchester Airport in my living memory. The withdrawal of BA based ops, the collapse of Intasun and XL, the Gulf War 1 downturn, the MAplc shunning of early LCC's, eco-fanaticism, recessions, industrial disputes, the decline of the package tour ... all dwarfed by this news. But MAN / EGCC will survive. It will remain a desirable asset even as it is sidelined by bonus-driven beancounters.
Time for another Vimto!
SHED.
Waiter! Fetch the Razor Blades!