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Eujet cease operations/Manston(Merged)

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Eujet cease operations/Manston(Merged)

Old 25th Jul 2005, 09:29
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EUJET share suspended

looks like another sad end.

RNS Number:2470P
Planestation Group PLC
25 July 2005


PlaneStation Group PLC ('the Company')

Suspension

On 28th June 2005 the Company announced that the passenger numbers of EUjet, the
Group's low cost regional airline based at Kent International Airport, would
fall below planned levels during the current year. As a consequence the cash
requirements of EUjet would be greater than originally planned. The directors
indicated that this shortfall in cash would be funded by asset sales and at the
same time announced that the Company had entered into an exclusive agreement to
dispose of 75 per cent. of its interest in Kent International Business Park.

The Company's bankers were fully informed of the Group's position and the need
for ongoing support and an extension of facilities whilst the disposal was
completed. Until now the directors had no reason to believe that support from
its bank would not be forthcoming. However, discussions with the Company's bank
over the last 48 hours have not been positive and the Company has been informed
this morning that the bank is no longer able to support the Company with
additional facilities. The Company has therefore requested a suspension of
trading in its securities pending clarification of its financial position.

A further announcement will be made in due course.


ENDS
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Old 25th Jul 2005, 10:22
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What does this mean in laymans terms ?
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Old 25th Jul 2005, 10:34
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In layman's terms:

The company's Bankers won't lend them any more money. As a result, the company has asked the Stock Exchange to suspend dealings in its shares. That means speculators can't drive the price down further, and current shareholders are stuck.

In reality I think it will mark the end of EU Jet. The Planestation group has tangible assets, mainly in the form of property. All that EU Jet represents (financially) is an on-going liability. It doesn't own any aircraft, and can only continue to operate if its losses can be financed. Its Bank has said no to that, and they will know as much about the company and its prospects as anyone.

The only hope for EU Jet is that someone will want to buy it. But with poor load factors across a third-rate route network, an eccentric choice of aircraft, and the likelihood of more losses, that seems a pretty remote possibility.
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Old 25th Jul 2005, 10:52
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Shame.

The Manchester- Manston route has been very handy for my aged aunt. Instead of a five+ hour drive in my cousin's car she has been doing door to door in just three. He hasn't been grumbling either at missing out on a 12 hour round trip!
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Old 25th Jul 2005, 11:09
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Tried a test booking, site was about to take £200 off me for MSE to VLC return, then got this:

RUNTIME ERROR CONDITION

mkdir /: Permission denied at d:/inetpub/wwwroot/skylights/lib/Storage.pm line 992


Do they have a web developer doing the consumer a sneaky favour, or is this just a co-incidence?
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Old 25th Jul 2005, 11:10
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Sadly - also lots of money lost by passengers who had prebooked sun holiday seats out of SNN. SNN to the sun were there best performing routes.
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Old 25th Jul 2005, 12:43
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I also heard a report that Gatwick,allegedly, have denied
EUJet any further account/credit facilities when diverting
from Manston.

They can only use Gatwick on a cash only basis, and consequently
EUJet are looking for other 1st alternate airfields.

Presumably though any other airport will require cash only too.
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Old 25th Jul 2005, 13:27
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Unhappy Final whistle for EU Jet?

From the BBC here

Shares in airline firm suspended

EUjet began commercial flights from Manston in September 2004
The future of budget airline EUjet could be in doubt after shares in its parent company were suspended.
The PlaneStation Group's shares were suspended after bankers said they could not support any additional finance for EUjet, based at Kent's Manston Airport.

PlaneStation said passenger levels for 2005 would fall below planned levels, meaning it would need a cash input.

EUjet runs four Fokker 100 aircraft, flying from Manston to 18 destinations in the UK and Europe.

It began operating in September 2004 and has already axed two of its destinations - Madrid and Glasgow - because of low passenger numbers, and postponed plans to start flights to Cologne.

'Meetings taking place'

EUjet hoped to have 500,000 passengers in its first year of operation but in its first three months of flights carried only 71,000 people.

It lost £6.5m in the second half of 2004.

Last month PlaneStation had to sell off its 75% interest in the Kent International Business Park in Manston, blaming EUjet's poor passenger numbers.

PlaneStation said discussions with its bank over the past 48 hours had "not been positive" and the bank said it was no longer able to support the company.

EUjet's commercial director Stuart McGoldrick said: "We are due to operate 16 flights today. There are meetings taking place to see what happens next."

PlaneStation has also become involved in a row with Thanet Council over the funding of a consultative committee supposed to monitor the airport's impact on the local community.

PlaneStation has not paid bills for the committee since June, but said it was aware of its responsibilities and felt "the issue was better dealt with between the involved parties".

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Old 25th Jul 2005, 13:36
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Flew with them as pax in Feb to Nice and return. Easy, BMI etc all full both ways due to a major conference in Cannes. Outbound was 85% full, return 35%, yet I know of people who flew to Marseilles with Easy and hired a car to get to Cannes.

No-one I met at the conference had any idea there were flights available - EU's marketing can not have been effective. Added to that Manston is miles from any decent sized centre of population. The plus side is that you can park long-term only 90 seconds from the check-in/arrivals!
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Old 25th Jul 2005, 13:59
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What now for Manston?

So has Manston got a future now that it looks like EUjet is going belly up. I wouldn’t have thought that the odd cargo flight is going to pay for the upkeep of the airport.
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Old 25th Jul 2005, 14:20
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The company is going, going, gone..........
the management are looking for investors to fund eujet. they may be flying tomorrow, but i dont think the end of the month is looking too bright!
who would put money into an airline that has just caused one company to go bust?
all those in favour say "I"....................
and the management wonder in the silence of the boardroom...............
 
Old 25th Jul 2005, 14:22
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Its planestation

It is the parent company:- Planestation who is going belly up first. It was of couse killed by eujet. It is not yet dead just critical. The bank has turned off the life support. if anyone has a spare £50 million I am sure it could be saved for a year or two.

And without the debt mabe someone will takeover marston who can spend enoguth to advertise it.
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Old 25th Jul 2005, 14:23
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Dont you just love the accuracy of some of the BBC reporting. They quote bookings from the first three months of operation . Had they bothered to look at the latest published figs they would have seen for June:

Load factor represents a new monthly high.
EUjet has now flown 306,388 passengers since scheduled services began in September 2004.
Total net bookings since commencement now total 402,765.

Seems a pretty good performance to me but I guess not to the banks.

On another point does anyone know what happens to the mega amounts of money paid in advance bookings? I was told by a senior EU jet man some months back that EU didnt actually get their hands on this until the flights actually flew. If thats the case isnt it sensible to let the summer schedule fly as planned?
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Old 25th Jul 2005, 14:29
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may be sensible to fly summer, but u cant book tickets, off the website anyway, so i think it is done and dusted.............
 
Old 25th Jul 2005, 14:42
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Seems a pretty good performance to me but I guess not to the banks.
I think if you look at the total seats available since they started flying in September, 306,388 passengers represents an average loading of about 35%.

I'm not sure what your idea of a good performance is, but that's pretty shocking from my point of view.
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Old 25th Jul 2005, 14:42
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Booking engine seems ok at the moment for flight res.
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Old 25th Jul 2005, 14:56
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Andy S

My point was that the forecast passenger level wasnt that far out. The last figures quoted a load factor of I think 54%. The initial utterances from the company was that they could make a profit at 50%.

Its an amazing story of a complete lack of marketing expertise. Having said thet and having flown as a pax with EU many times the service they offer (Lets use the present tense) from Manston is second to none.

Fingers crossed for an "Angel"

BobD
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Old 25th Jul 2005, 15:05
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Surely the best thing for Manston would be to be taken over by someone like Peel or CityHopper who could do something similar to DSA (after all without EU Jet, Manston has very few flights)
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Old 25th Jul 2005, 16:01
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I don't really think - in terms of location, transport links or infrastructure - that Manston is comparable to DSA.

It's interesting that although the Planestation Group has been financially weak for a couple of years, no one has tried to take them over. If they had, I would have thought that Planestation would have welcomed them with open arms.
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Old 25th Jul 2005, 16:17
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Hello, my earlier reply seems to have disappeared, possibly because I mentioned someone by name. Ooops!! Let's try again.

The only time I'm aware that EUjet mentioned the 50% breakeven figure was in a television interview with one of it's executives. The trouble is, that figure doesn't really mean a lot without some sort of context, i.e. what assumptions were made about the fares - was this based on a range of fares, or all the seats being sold full price? I couldn't help but be sceptical, because to make money out of half full aircraft surely they either need to be getting top dollar for the tickets, or have an extremely low cost base.

Even if they are making a little money at the moment, it's the middle of summer right now. Aren't they going to get stuffed during the winter months?
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