Glasgow Prestwick may be sold - Ryanair cuts - passenger decline

[j636]

Infratil May Sell Glasgow Airport as Ryanair Cuts Flights - Businessweek

[theredbarron]

Which begs the question: "In these economic times who the hell would want to buy it?" If there are no buyers, and there won't be many (if any) around, Infratil's other option to cut their losses has to be to close it and save on business rates, airfield upkeep, air traffic, fire service etc, and that would be a BIG problem for Ryanair who need the airfield for their major maintenance facility there.

Implications here with the BAA sale of Glasgow or Edinburgh. If Glasgow is sold to an operator willing to do low cost deals then PIK's future is absolutely zilch and Infratil will be stuck with a white elephant. On the other hand if BAA sell Edinburgh then maybe just a flicker of hope.

Interesting times ahead. Let's hope that an important part of Scotland (and the UK's) aviation past isn't about to be consigned to the history books.

[The Hypnoboon]

With potentially the two Glasgow airports for sale interesting times are ahead for aviation in the west of Scotland.
However as I suggested in the Edinburgh thread (and was promptly shot down) if Ryanair were to move to Glasgow, then Prestwick may actually benefit in the long run. Allow me to explain my thinking, it may be wrong or you may not agree, it is simply my opinion.

Ryanair has a total stranglehold over management and facilities at Prestwick. With the fees (if any) they pay, Prestwick will not be able to gain much of a return on any investment that is made in the Airport.
This we all know, but look at it from another point of view, from a prospective airline, they see that Ryanair has a stanglehold over the Prestwick market, they know that Ryanair will likely try to crush them with agressive marketing and low fares. This monopoly makes Prestwick (along with the severly out-dated facilities etc) an unattractive proposition for an operator looking to come into the Glasgow market.
However if Ryanair were to decamp up the M77, new markets could be targeted by PIK management (again, this is opinion) such as E-Jet or CRJ size operators for some of the stronger performing routes or some city routes with short break potential (Paris, Barcelona, Budapest etc) along with a tour operator or someone like Monarch for sunshine routes.

However I have to concur with theredbaron, in this financial climate, who would want an airport that essentially requires a complete rebuild to bring it up to date?

[cornishsimon]

BA have just opened up a MX facility at PIK, its possible that the airfield could continue without scheduled airline ops.

Fire cover etc could be significantly reduced if companies are only flying empty/cargo flights into an airfield when compared to cover needed for a 737-800

[peba]

ryanairs business model is built on expansion. so it does business with the attitude of a 2006 estate agent.IF YOU DON'T TAKE THE DEAL WE ARE OFFERING SOMEBODY ELSE WILL. The time will be very soon,when ryanair will need to expand into the main airports of europe,(with some obvious exceptions of course) in order to attract more pax.If they up their tools in Prestwick and move elsewhere,they will have to pay the going rates which o leary will not like one bit.Look at MAN for instance.He had a row with them but has now gone back with his tail between his legs looking for another deal.The time will come when this business model has to change and o leary with it (or new CEO).He cannot bully airports like he used to and he knows it.

I doubt if he will ever close PIK base,simply because ryanair has become a summer airline now,(it has got way to big for its boots) and it is a handy maintenance/parking facility in the uk. It is all a threat to get a better deal for the next summer period.
I WILL CLOSE THIS BASE IF I DON'T GET THIS AND THIS etc.....This winter will be quite but come next summer the sun will shine and ryanair will still be in PIK.

[theredbarron]

Peba, I understand what you say about Ryanair maybe having to change their business model but that's a bit in the future. In the short term if Infratil close Prestwick if there is no buyer for it as a going concerm then MOL will have no option but to close his PIK base. End of.

As for freighters continuing to use the runway and cargo facilities in the event that only the passenger terminal closed, I doubt that there would be a sufficient revenue stream from them to pay for airfield upkeep and even limited fire cover etc. I suspect the cargo carriers would simply decamp, possibly to Robin Hood which isnt too far away and has absolutely first class facilities.

A sad state of affairs

[Skipness One Echo]

BA have just opened up a MX facility at PIK, its possible that the airfield could continue without scheduled airline ops.

You mean again! PIK always had the cargo through the dark times but worth remembering on the passenger side it went like this :

1990 end of transatlantic gateway status, Northwest, Air Canada and some of the Worldways flights decamp to Glasgow. Worldways then go bust!
1991 Air Transat operate a season with the L1011 PIK-YYZ, when this ends in Sep, passenger services cease at PIK.
1992 *no scheduled or charter passenger services*
1993 Business Air launch PIK-JER on a Sat in the summer
1994 FR launch PIK-DUB and a good number of summer charters with operate on various UK and foreign sun carriers
1995 FR launch PIK-STN, ends in three weeks with me on the last flight (!)
also Caledonian base an A320 for four days a week all summer

In recent years, the traffic carried by various summer operators has been snapped up by FR meaning passenger traffic is almost entirely dependent on them. If they lose all pax traffic, PIK proved it can survive on cargo only once before, but that was in the days of BAe. As it is, I don't think passenger operations add much to the bottom line anyway but I don't think we should be too alarmist. Being run from Wellington was not the greatest commercial masterplan let's be honest. "Pure Dead Brilliant" anyone?

The best plan is for summer sun routes and then the bare minimum over the Scottish winter, as the market is intensely seasonal alas, always has been. The European city routes did OK but as expected moved to EDI with the bigger inbound tourist market.

However if Ryanair were to decamp up the M77, new markets could be targeted by PIK management (again, this is opinion) such as E-Jet or CRJ size operators for some of the stronger performing routes or some city routes with short break potential (Paris, Barcelona, Budapest etc) along with a tour operator or someone like Monarch for sunshine routes.

E-Jet or CRJ would not work without high volumes of premium passengers, something PIK has never enjoyed. PIK did have a good relationship with Airtours / MyTravel for a few years but again the temptation to consolidate at GLA meant it didn't last.

[The Hypnoboon]

I don't know if it's coincedince, but Tom Sheilds at The Herald has written a cracking article on Prestwick, laced with humour.

Cherishing Prestwick airport - Herald Scotland | Comment | Tom Shields

And correct me if I'm wrong, but it's in the back of my mind, did MO'L not once say that Ryanair were looking to run an airport? Well, now's his chance to bag one on the cheap...
Although I'm not too sure I'd like to go through a a Ryanairport...

[Scottish Flyer]

I think we need to take a step back here and look at what has actually been said by Infratil. The chief executive has been quoted as stating that they may sell, not that they will. My reading of that is that they are testing the market. By making it known that they may be interested in a sale they are then waiting to see if they get any approaches or offers. The possibility of Glasgow also coming on the market may also be an influence. Infratil will not dispose of Prestwick unless they get a realistic price and now is not a good time for selling UK airports. The BAA's delaying tactics over selling airports is partly in the hope that the market improves and they can get a better price. In the longer term I can see Infratil selling both Prestwick and Manston. They originally planned to own a number of European airports - plans which did not come to fruition. Their only other acquisition was Lubeck which they have already sold. All Infratil's other interests are in Australia & New Zealand so it makes little business sense to continue ownership of 2 UK airports.

Prestwick has survived in the past and there is no reason to think that it doesn't have a role in the future. It doesn't have all its eggs in one basket with very diversified operations from passengers, cargo, maintenance, military, training, general aviation and transit traffic, some of which have increased significantly in recent years. Cargo has been static for some time and passenger figures have declined considerably (here less dependance on Ryanair would help as the only other scheduled carrier is Wizz Air).

Changes are ahead but they are probably not immediate. I am sure Prestwick will weather any storms that come its way.

[Aero Mad]

And for those of us who aren't subscribed (the Herald should do more to stop tech-savvy people from reading their articles anyway).

http://img191.imageshack.us/img191/2121/prestwick.jpg

[Facelookbovvered]

Another Teesside?

I don't blame FR for PIK fall from grace, its continued longer than it would have done with out FR for sure!

FR do tend to scare away many airlines at the smaller airports because their cost advantage is so great ($20 a seat i reckon) less of a problem at the likes of MAN EMA BHX LBA where there is volume to be had.

With passenger volumes in free fall in the UK PIK could well be the next BFS with a wavier of APD for direct long haul flights from PIK at which point CO in GLA will kick off!!

APD has become a dogs dinner of a tax policy, the only hope is that it has become so dire that something will have to give sooner or later, i suspect the chancellor will move in some way at his Autumn statement with ETS starting next year they must wake up to the havoc they are doing to the uk aviation industry, bmi on the brink,Flybe profit warnings, TCX shedding pilots and aircraft, Monarch canx the 787, lot of high paying jobs and easy to collect tax revenue, unlike FR's merry bunch of self employed tax avoiders.

Even the Jarrow marchers gave up at Harrogate, it won't belong before 3/4 of the UK population never go to Scotland, its cheaper to fly anywhere else........get off soap box

PIK has fond memories of qualifying cross country, it seemed along way from NCL

[leeds 65]

Chilling comments taken from the Infratil annual report earlier in the year :


'Infratil’s two remaining European airports continued to experience very
difficult trading conditions. Notwithstanding excellent cost control, losses grew as traffic continued to weaken.
The airports in Glasgow and Kent represent 4% of Infratil’s assets and contributed an EBITDAF loss of £5 million (NZ$10 million) for the year.
Management is very aware of this disproportionate value/contribution aspect and the situation is receiving the urgent attention it warrants. There are several solutions possible, but regrettably the preferred one, an improving European aviation scene lifting activity and hence income, seems the least likely.'

They will sell,the european airports division is not even mentioned in some of their presentations (so they can 'hide' their disappointing performance). Ok its only 4% of group assets but in my estimation they are planning an exit strategy.The question is - who in their right mind would buy in this environment ?

[Leatherman]

EGPK

FR do not do major maintenance at PIK only A+ checks. They don't own the hangars and have very few of their own staff there. Wages are slave labourish. They could move out easily.
BA Glasgow have taken the big hangar for 2 years with their program of a+ checks on A320. Not much use to them if they cannot fly them in and out it would nullify the lease I guess?
FR cutting to 12 flights per week come end of OCT which includes cutting the STN flight completely! Ouch.
Freight figures(only 2 operators) are down 11% from even last abyssmal year and summer pax figures are well down.
Military don't use it so often now because of the intrusions in 2007.
Private use is minimal.
They have so many empty offices and warehouses. Hardly a freight forwarder at the airport.
On the plus sisde they've opened the spectator gallery! You can view FR pax boarding! But as most freighters come in the middle of night you won't see 74's.
Maybe if NZ win world cup they may donate it to someone?

[Scottish Flyer]

Leatherman - I don't know where you get your information from but there are considerable inaccuracies. While Ryanair have cut back on their winter schedule from last year, particularly with the loss of the Stansted route, there are far more than 12 flights a week - approximately 6 a day! Dublin has 11 weekly flights alone and Derry is daily. Military use can be sporadic but is still at a reasonable level as is other transit traffic. There is sufficient to support 2 handling agents, so it is hardly dead.

[james170969]

I work in Ardrossan and Saltcoats and during the day and I have seen quite a number of 747s flying in and out of Prestwick lately. Yes, times are hard and things could be better for Prestwick but it definately is not dead!!

[sam dilly]

There used to be a lot of summer charters, from PIK Lourdes as a for instance.
Along came great the God Ryanair, charters no longer welcome.
Lots of Lourdes in the last few years from EDI , with a few from GLA .
Jetway operations at both these airports, a friendly welcome.
Go back to PIK ?
Very unlikely !
You chose Ryanair, your risk, I can't see any charter operators going back.

[PIK3141]

And another post with inaccuracies. There are Lourdes charters every year from PIK. There have been Lourdes charters this year from PIK. They use PIK so that they do not have to cope with stairways in the terminal. They use PIK so that they do not have to use airbridges.

[Leatherman]

EGPK WINTER

From the PIK website. Yes sorry. It is 12 routes. Does not say about frequencies. Quite a cut back though. STN is a blow, but plenty of London flights from GLA anyways.
Just hope peeps can afford to get away to the sun in these harsh times. Still there is the credit card eh? Sure we will see the young lassies off to Shagaluf to get banged 20 times in 6 days.

[james170969]

So when Ryanair moves into an airport all the charters move out? Suppose Ryanair moved from Prestwick up to Glasgow where would the charters move to? Prestwick?

[Leatherman]

74's EGPK

Ardrossan observant. There are only 7 freighter flights per week, only 2 of them westbound, and quite often they don't stop PIK if loads dictate.
Of course it's no dead it is pure dead brilliant!