MANSTON -3
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Manston Airport - Capital Valuations
Those of us who have had an involvement with Manston for some time will recall that this is not the first time we have been given suspiciously optimistic valuations for the site as a capital asset.
Back in the early Planestation days, a number of respected city analysts, in addition to predicting great business revenue at MSE were placing a Market Capital Value on the asset in excess of 300 million sterling! Most people were optimistic and gullible enough to believe the whole story (myself included), and we bought shares in our droves.
Of course, we all know what happened. Manston failed to attract enough business, and even with the facility of scheduled night flights the whole thing went bust and the airport sold for a paltry £17M.
Of course, the shareholders were furious, and all kinds of recriminations and threats of legal action were levelled at the analysts who had made these predictions. It turned out, in the end, that they knew little of the real situation in Kent, and one of them was, in fact, being paid by Planestation.
I mean no disrespect to Mr Foster of ABN Amro, but I suspect he also knows little of the situation in Kent, as it would appear he is in New Zealand. It is dangerous to assume that because Belfast City sold for more than expected, that KIA is worth 74 million quid. Manston has a disastrous track record, and little hope for the future, and it is hard to imagine anybody wanting to buy it as a realistic business proposition.
Looking closely at the quoted interview with Lloyd Morrison, it is interesting to note he no longer makes reference to traffic or revenue at Manston, but only what it might be worth in capital terms.
This would tend to confirm the suggestion that they are limbering up to sell the place, and would also account for the urgent need to find commentators who are willing to place a high value on the property.
Back in the early Planestation days, a number of respected city analysts, in addition to predicting great business revenue at MSE were placing a Market Capital Value on the asset in excess of 300 million sterling! Most people were optimistic and gullible enough to believe the whole story (myself included), and we bought shares in our droves.
Of course, we all know what happened. Manston failed to attract enough business, and even with the facility of scheduled night flights the whole thing went bust and the airport sold for a paltry £17M.
Of course, the shareholders were furious, and all kinds of recriminations and threats of legal action were levelled at the analysts who had made these predictions. It turned out, in the end, that they knew little of the real situation in Kent, and one of them was, in fact, being paid by Planestation.
I mean no disrespect to Mr Foster of ABN Amro, but I suspect he also knows little of the situation in Kent, as it would appear he is in New Zealand. It is dangerous to assume that because Belfast City sold for more than expected, that KIA is worth 74 million quid. Manston has a disastrous track record, and little hope for the future, and it is hard to imagine anybody wanting to buy it as a realistic business proposition.
Looking closely at the quoted interview with Lloyd Morrison, it is interesting to note he no longer makes reference to traffic or revenue at Manston, but only what it might be worth in capital terms.
This would tend to confirm the suggestion that they are limbering up to sell the place, and would also account for the urgent need to find commentators who are willing to place a high value on the property.
Get rid of the 106 restriction and traffic through the airport will flourish.
Throughout the years I've followed Manston's fortunes, it has always - allegedly - just been one deal, one news story, one improvement or one piece of paperwork away from flourishing.
Once upon a time, all that was needed was for the aprons to be expanded to cope with 'pent up demand'.
Then it was capacity and customer service problems at Heathrow.
Then it was the BIP.
Then it was EUjet.
Then it was the fast rail link.
Now, apparently, all that's needed is to scrap the 106 and Manston will thrive.....
What will people think of next?
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I am a property valuer although have never valued an airport and don't wish to start now!
However there are a number of approaches to arrive at a capital valuation: -
Rental - You basically capitalise the rental stream - unlikely to give a particularly high valuation for Manston!
Profits - You basically capitalise the profits -------- hmmmm!
Contractors - You calculate the cost of rebuilding the facility - Likely to be pretty high!
Development value - You work out a site value for alternative use
Or you could do part and part on the ground some areas have development value, some areas are occupied and achiving a rental stream.
Valuation is an art not a science and 2 valuers will come up with the same answer! But something like Manston is very difficult to value and I am glad I don't have the job.
In reality it is worth what someone is prepared to pay for it and at the end of the day that is a commercial decision by the purchaser!
However there are a number of approaches to arrive at a capital valuation: -
Rental - You basically capitalise the rental stream - unlikely to give a particularly high valuation for Manston!
Profits - You basically capitalise the profits -------- hmmmm!
Contractors - You calculate the cost of rebuilding the facility - Likely to be pretty high!
Development value - You work out a site value for alternative use
Or you could do part and part on the ground some areas have development value, some areas are occupied and achiving a rental stream.
Valuation is an art not a science and 2 valuers will come up with the same answer! But something like Manston is very difficult to value and I am glad I don't have the job.
In reality it is worth what someone is prepared to pay for it and at the end of the day that is a commercial decision by the purchaser!
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It's always possible that Infratil could parcel it up and sell it in small parcels. It is likely that the sum of lots of bits would be greater than the whole.
The valuation when it was bought 3 years ago is very dependent on how it was valued, what the conditions of sale where, the speed of the deal etc.
So whilst the property market may be in turmoil know it doesn't necessarially mean that Manston would be worth less now than it was 3 years ago, especially if 3 years ago it was sold as a single package, whereas now it is being valued as a total of lots of little packages.
However at the end of the day we don't know what is happening and just have to wait and see. In a few years some on this forum will be able to say I told you so!
The valuation when it was bought 3 years ago is very dependent on how it was valued, what the conditions of sale where, the speed of the deal etc.
So whilst the property market may be in turmoil know it doesn't necessarially mean that Manston would be worth less now than it was 3 years ago, especially if 3 years ago it was sold as a single package, whereas now it is being valued as a total of lots of little packages.
However at the end of the day we don't know what is happening and just have to wait and see. In a few years some on this forum will be able to say I told you so!
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But that is because the answer hasn't arrived yet!
It won't be until either it is sold for development, or that it is obviously a roaring success that people will be able to say "I told you so"
Obviously that day has been predicted as coming soon on many different occasions.
One would suggest that that day remains just as far away at present as whilst the credit crisis makes running the airport potentially a less viable option it also reduces the viability of a redevelopment!
It won't be until either it is sold for development, or that it is obviously a roaring success that people will be able to say "I told you so"
Obviously that day has been predicted as coming soon on many different occasions.
One would suggest that that day remains just as far away at present as whilst the credit crisis makes running the airport potentially a less viable option it also reduces the viability of a redevelopment!
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SEDA
Kent International Airport poised to get commercial passenger flightsCommercial passenger flights may soon return to Kent International Airport after a survey revealed people in the South East were in favour of the move.
Some 71 per cent of those polled said scheduled commercial passenger flights from the International Airport were very important, underlining the huge demand for the services.
Matt Clarke, Chief Executive of Kent International Airport termed the response an "excellent vote of confidence" which he said would boost the airport's efforts to re-introduce the services in the county.
He said: "We believe that Kent International Airport has a major role to play in delivering passenger services to the residents of the South East.
"This was reinforced by the fact that more than three out of every four of respondents have been inconvenienced at other London airports due to the distance and travel time, traffic, parking and long queues and crowding when they get there."
The return of the services is expected to have local economic benefits
Kent International Airport poised to get commercial passenger flightsCommercial passenger flights may soon return to Kent International Airport after a survey revealed people in the South East were in favour of the move.
Some 71 per cent of those polled said scheduled commercial passenger flights from the International Airport were very important, underlining the huge demand for the services.
Matt Clarke, Chief Executive of Kent International Airport termed the response an "excellent vote of confidence" which he said would boost the airport's efforts to re-introduce the services in the county.
He said: "We believe that Kent International Airport has a major role to play in delivering passenger services to the residents of the South East.
"This was reinforced by the fact that more than three out of every four of respondents have been inconvenienced at other London airports due to the distance and travel time, traffic, parking and long queues and crowding when they get there."
The return of the services is expected to have local economic benefits
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The Airport certainly won't work if everyone talks it down the whole time!
There are good reasons why people from the South East might want to use Manston. These are predominately to do with not having to use the M25 to get there, short check-in times, parking near the terminal etc.
However if the airport got too busy some of these advantages would disappear!
The real skill comes into determining how many of the 71% will in reality consider flying from Manston, and of course the first thing they need to know that is whether the flights are going to a destination they want to go too, and at a time they want to go.
The problem is that if you have a new or unknown airline operating routes out of Manston potential passengers will be wary about booking in case the airline goes under. Over time that fear would of course decrease. This means you either need a very well funded new/unknown carrier, or an established one to offer flights. The former will take several years to get established at Manston once services started, the latter would take a year or two.
But of course there are very limited sources of funding for this, particularly in the current climate.
Cettainly if Manston offered flights to a somewhere I wanted to go I would consider it, because even though Gatwick is a lot closer for me, using Gatwick is a pain. However I only fly shorthaul once every 2 years or so, so a lot of "me"s are needed!
There are good reasons why people from the South East might want to use Manston. These are predominately to do with not having to use the M25 to get there, short check-in times, parking near the terminal etc.
However if the airport got too busy some of these advantages would disappear!
The real skill comes into determining how many of the 71% will in reality consider flying from Manston, and of course the first thing they need to know that is whether the flights are going to a destination they want to go too, and at a time they want to go.
The problem is that if you have a new or unknown airline operating routes out of Manston potential passengers will be wary about booking in case the airline goes under. Over time that fear would of course decrease. This means you either need a very well funded new/unknown carrier, or an established one to offer flights. The former will take several years to get established at Manston once services started, the latter would take a year or two.
But of course there are very limited sources of funding for this, particularly in the current climate.
Cettainly if Manston offered flights to a somewhere I wanted to go I would consider it, because even though Gatwick is a lot closer for me, using Gatwick is a pain. However I only fly shorthaul once every 2 years or so, so a lot of "me"s are needed!
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Thread going round in circles a bit I'm afraid.
I'm surprised this survey is being discussed as it was posted here some time ago and is old news.
Long term Manston watchers will tell you there have been umpteen "surveys" over the years - some conducted by the airport owners, some by the local authority, and some by the local press, and all claiming to draw the same conclusion - that there is a healthy demand for services at MSE.
Of course, the owners are seeking a positive prognosis for the airport, the local authority are seeking business rate revenue, and the press are sniffing for more advertising income, so the credibility of these surveys is questionable.
A survey might be a useful tool at start-up, but after nearly ten years of failed operation, this is simply a desperate PR exercise.
The sample group for this latest effort was, I believe, 10,000 people, and the nature of the way it was conducted would suggest it mostly attracted people who had already used Manston.
The 71% of postive respondants only equates to 7000 people who were interested enough to reply, which out of a supposed catchment population of 1.6 million doesn't amount to much I'm afraid.
Of course, the best "survey" is a real airline offering real tickets at a real price, and from observing the track record of Seguro, Newmarket, and the little Jersey flights, the demand for this would appear to be around 50 return passenger flights per year in total from MSE.
I'm surprised this survey is being discussed as it was posted here some time ago and is old news.
Long term Manston watchers will tell you there have been umpteen "surveys" over the years - some conducted by the airport owners, some by the local authority, and some by the local press, and all claiming to draw the same conclusion - that there is a healthy demand for services at MSE.
Of course, the owners are seeking a positive prognosis for the airport, the local authority are seeking business rate revenue, and the press are sniffing for more advertising income, so the credibility of these surveys is questionable.
A survey might be a useful tool at start-up, but after nearly ten years of failed operation, this is simply a desperate PR exercise.
The sample group for this latest effort was, I believe, 10,000 people, and the nature of the way it was conducted would suggest it mostly attracted people who had already used Manston.
The 71% of postive respondants only equates to 7000 people who were interested enough to reply, which out of a supposed catchment population of 1.6 million doesn't amount to much I'm afraid.
Of course, the best "survey" is a real airline offering real tickets at a real price, and from observing the track record of Seguro, Newmarket, and the little Jersey flights, the demand for this would appear to be around 50 return passenger flights per year in total from MSE.
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Pax Survey
I think the best indication that pax were prepared to use Manston is the fact that 306,682 passengers did use Manston during the EUJet days, over a period of 11 months.
For whatever reason, those 306k pax voted with their bums on seats. The indication is that there is a market out there that Manston can tap. One thing is for sure, if there are no scheduled flights, no-one can book them.
For whatever reason, those 306k pax voted with their bums on seats. The indication is that there is a market out there that Manston can tap. One thing is for sure, if there are no scheduled flights, no-one can book them.
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Green House's seem to be the best investment at the moment in Thanet, I understand that further 18 could be put up over the next 3 years.
Perhaps the Airport if it closed, would make a ideal lorry park and freight packing center.
I do think that it will work as an Airport in the longer term, some I know think it won't.
But only time will tell, I will away's talk the airport up, because I do think it would be great for thanet.
Let us wait untill the fat lady sings. with the good news or bad news.
How long this will be be 5 years or 5 weeks.
I am sure some one will tell me.
Perhaps the Airport if it closed, would make a ideal lorry park and freight packing center.
I do think that it will work as an Airport in the longer term, some I know think it won't.
But only time will tell, I will away's talk the airport up, because I do think it would be great for thanet.
Let us wait untill the fat lady sings. with the good news or bad news.
How long this will be be 5 years or 5 weeks.
I am sure some one will tell me.
Last edited by euroairport; 7th Oct 2008 at 11:55. Reason: error
Paradism,
All that proves is that if you lay on flights to / from enough places at the right price, then there are people prepared to take advantage. The trouble is we all know what happened to EUjet, which indicates to me that the route network and pricing structure were not actually commercially viable. The fact that other airlines have not rushed in to fill the vacuum also speaks volumes IMO.
You can point at the 306,000 pax who used the airport during this period all you like, but until someone can find a way of operating the same schedule profitably, then that number doesn't mean a great deal.
All that proves is that if you lay on flights to / from enough places at the right price, then there are people prepared to take advantage. The trouble is we all know what happened to EUjet, which indicates to me that the route network and pricing structure were not actually commercially viable. The fact that other airlines have not rushed in to fill the vacuum also speaks volumes IMO.
You can point at the 306,000 pax who used the airport during this period all you like, but until someone can find a way of operating the same schedule profitably, then that number doesn't mean a great deal.
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I have found a parallel universe or in this case an airport. It to has the same type of press releases ozing confidence. It is across the water @ SEN. Like you guys we are waiting for the second coming?
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To quote catflaps (had Manston been wound up ten years ago, by now we might have had a thriving business park).
He might now get what he want's
Plans to turn 175 acres in Thanet into a warehouse and distribution centre for Chinese electronics will be decided by Thanet District Council on Thursday. Manston business park project, known as the "China Gateway".
lets hope the council pass these plans.
He might now get what he want's
Plans to turn 175 acres in Thanet into a warehouse and distribution centre for Chinese electronics will be decided by Thanet District Council on Thursday. Manston business park project, known as the "China Gateway".
lets hope the council pass these plans.