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Old 20th Jan 2014, 14:58
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yes Basil, understood. I think your explanation was somewhat clearer than the M E N !
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Old 20th Jan 2014, 16:09
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Touching slightly on the above discussion, the shock decision by BA World Cargo to pull the plug on its STN-based Global Supply Systems operation is clearly bad news for STN (and MAG). GSS, the joint-venture cargo airline run by BA and Atlas Air, operates 3 x B747-8F. Operations are planned to cease in April.

In place of GSS, BA is reported to be concluding a major deal with Qatar Airways for cargo space. Whilst some dedicated freighter services (to London) are anticipated, I wonder whether underfloor capacity on ex-UK passenger flights could be involved also? Do the MAN flights have much spare freight capacity anyway? Something to keep an eye on.

Meanwhile, this news is another unwelcome headache for MAG at STN as one of the few major operators aside from Ryanair makes its exit.

Speaking of MAG profits (and financial liabilities), we often enjoy discussions on this board relating to investment in terminal expansion and the relative benefits of the different options for enhancing T1 / T2 / T3. The problem is I sense no urgency from MAG to invest in upgrading any of the three terminals aside from minor cosmetic updates and essential upkeep. Can anybody reassure me that developing the old flagship airport has not been shelved indefinitely by the STN-obsessed MAG suits? We hear all about the joint-venture off-airport office space projects (Airport City), but what about the core airport terminal infrastructure? Aside from fondly-remembered old plans gathering dust in the MAG bookcase, anything doing?
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Old 20th Jan 2014, 16:25
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Just on the comment or two about MAG airports better profit % than STN etc.


MAG had no control of the outcome of 2013 at STN at all where as they did at all other MAG airports where airlines had plans in place for 2013, that was not the case in STN. With 2014 looking well for STN and if FR bring the pax, STN could easily pass MAN out in a few years time in profitable terms.


I do agree MAG do need to invest a little capital in MAN to improve certain things.
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Old 20th Jan 2014, 16:34
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Shed

My spies tell me that the penny has finally dropped and that some fairly radical terminal redevelopment schemes (including the T1/T3 merger) are being dusted off once again. The only potential fly in the ointment is that IFM were sold the 35% shareholding on the basis that little investment was required in the MAN terminal infrastructure. So there could well be some lively shareholder discussions ahead!
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Old 20th Jan 2014, 17:22
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Never suggested MAG wouldn't see the benefit but other airlines at MAN yield
per passenger on some routes would fall. All in the pricing...
Butter it up any way you want, todays news puts water on your fire. Not exactly anything to worry about in my books and surprised to see you still trying to argue the contrary.

Onwards and upwards with another busy summer of new routes and increases ahead......
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Old 20th Jan 2014, 17:46
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Looking forward, MAG hailed the launch of US Airway's service to Charlotte, North Carolina, this summer, and said it was targeting services to China, India, Hong Kong and other parts of America “in the medium-term.”
This will be hugely beneficial, bring it on!
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Old 20th Jan 2014, 18:14
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Yes Minister - Yorkshire MP gives Sir Howard Davies some advice !

Transport committee hearing interim report on Davies Commission, from a couple of hours ago.

Some well articulated words at point minute 45 Jason McCartney about "The North" and its contribution to this debate.

Pity it took "Mr Yorkshire" to raise the profile of The North AND primarily Manchester........ I despair !

"So did you visit Manchester"

"you visited Birmingham (wrong horse) so are you planning on a visit to Manchester Airport "

"I really think you should visit Manchester"

That said Graham Stringer waded in AGAIN and indicated that EVERYTIME an airline applies for open skies Ex Manchester a South East based airline cries foul....

Mr Davies and Tonto became somewhat confused at this point !

They won't fly direct from MAN themselves BUT woe betide anybody from a foreign land prepared to offer that service.......and so it goes on !

The media link is here !

Player

No idea who the clumsy somewhat flustered "office junior" is supposedly supporting Mr Davies.

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Old 21st Jan 2014, 12:11
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but what passenger projections were IFM sold for the 35% shareholding? One would hope that they will be happy to invest a bit if their dividend return has been higher than planned this year and growth in passengers shows an increase in revenue relative to projects going forward as well.


They must know about long term plans for MAN including all of the schemes we have seen come and go. So again, one would hope that this can be sold to them as bringing forward required investment because MAN is doing so well?!?
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Old 21st Jan 2014, 13:14
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To the extent that traffic and financials are indeed ahead of IFM's expectations you would be absolutely right. But I imagine that MAG will have sold the 35% on the basis of a very bullish set of projections - that's the way it usually works! So far so good, based on performance since the sale, but I don't think that actual performance is much ahead of what was expected.
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Old 21st Jan 2014, 16:47
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OK the customer experience may be going backwards,
queuing might continue,
and they may well still use the apron for parking cars (which appears to be a moneyspinner),

BUT if the revenue rolls in why invest anything in MAN .... ?

The Aussies made it clear they have absolutely no interest , the prize was always STN. I just cannot see them now turning round and compromising that revenue stream unless there were firm indications it would pay off !

Still maintain that had MAG jumped in bed with Abu Dhabi, they would have invested in MAN as well !

Might have benefitted from some further ETIHAD growth as well......

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Old 21st Jan 2014, 17:22
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Did the Aussies really say they had no interest in Manchester, it would be highly unlikely surely that someone would invest a billion pounds and only have an interest in part of that group. Manchester provides a significant %age of the group revenues I am sure that was equally attractive to them. However we shall wait and see who is correct.

Initially my thoughts were also I hope they go with the Abu Dhabi investors, but after further thought I wonder if they didn't as they were concerned the choice of a major partner with a significant interest in one single airline may have been off-putting to other airlines who have shown significant commitment to Manchester from the same region, if not elsewhere.
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Old 21st Jan 2014, 17:47
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It's simply wrong to infer that IFM's interest is solely in Stansted. Their investment is in the MAG group as a whole, and the non-STN airports will continue to generate the bulk of group profits for the foreseeable future.

Some confusion may have arisen over the fact that IFM's investment in MAG was conditional on winning Stansted. But this was at the insistence of MAG and its local authority shareholders, not IFM. The point is that MAG only needed the capital provided by a new shareholder in the event of winning Stansted. Without Stansted there would have been no need for new capital.
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Old 21st Jan 2014, 21:42
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But this was at the insistence of MAG and its local authority shareholders, not IFM

Well I must confess i'm perplexed, reading back I suspect now it was some pretty clumsy journalism but I certainly got the impression as I suspect a few others did, that whilst MAG clearly wanted to buy STN it was IFM who had the hand very much on the tiller, I "thought" they needed an airport operator to facilitate the deal !

I am convinced I read quotes from an IFM spokesperson suggesting "we will only invest if the Stansted deal goes through". OK that may still have been at MAGs bequest but it inferred that IFM held the whip hand ?

I got the impression that whilst MAG felt the purchase was a good deal they need IFMs £1.5B to do the deal, but with the conditions being laid out by IFM NOT the other way round ?

I'm sure that LGW went for same figure which make STN a "bit of a dear do" now that Davies has dismissed it !

Last edited by Bagso; 21st Jan 2014 at 22:17.
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Old 21st Jan 2014, 22:02
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Thanks for the link to the Transport Committee video Bagso

Some well articulated words at point minute 45 Jason McCartney about "The North" and its contribution to this debate.

Pity it took "Mr Yorkshire" to raise the profile of The North AND primarily Manchester........ I despair !
Think you are being unfair Bagso here. The way it works (or certainly used to) is that prior to the meeting, a list of themes and questions is drawn up by the Committee's expert adviser(s) for discussion internally. The advisers are usually the ones you see sitting on the left of the committee table as you are looking at the Committee. Then there is general agreement on who is going to follow what lines to give every MP a chance to ask something - especially where they have the interests of their constituents at heart.

So I suspect there was an agreement that the Yorkshire MP started off the North regional issue and this was then followed up by Graham Stringer on the bilaterals issue - one he has been involved in ever since he went into parliament decades ago.

Of course some on here say that there aren't any bilateral issues affecting MAN, but as someone pointed out here recently, it is thought that EZY won't start a MAN- LED which I believe they have rights for, until the rights for LGW - LED are sorted....

Mr Davies and Tonto became somewhat confused at this point !
They certainly did and Stringer extracted not only a commitment from them to share their legal advice on Open Skies etc with the Committee but also to provide further details of how these bilateral issues could be addressed as it would help the Commission. Howard Davies was obviously on the lookout for assistance here from his answer.

So hopefully MAG will be able to assist although you would have thought that they would have put something forward in the first place. Maybe they did and it got lost in all the other issues.

[quote]No idea who the clumsy somewhat flustered "office junior" is supposedly supporting Mr Davies.[QUOTE]

He is Mr Philip Graham who is the senior civil servant working as the head of the Commission secretariat. I think he works for DfT. Presume he wasn't expected as no name tag had been prepared for him, but there were a few anxious glaces at him from Howard Davies when he was unsure....

Whilst finding out who this character was I came across the link below which makes for some interesting reading. It's the judgement on the legal issues surrounding Geoff Muirhead's role on the Commission and his involvement after MAG bought STN. A good bit of bedtime reading!

Some highlights covers the fact that the Commission met MAG officials a few times last year and the fact that
"the purchase plan for Stansted did not rely on additional capacity"
about which there has been conjecture on this board for a while.

It also points out that "On the 19th of July 2013 MAG submitted their document entitled Capacity for Growth to the Commission. One point was

to support the growth of Manchester to the capacity of its two existing runways and a throughput of 55 mppa.
It's about time the master plan was updated; last published in 2007 I think. The generally accepted view is that a Master Plan should be updated every 5 years, so hopefully we will hear some more on MAN's proposed infrastructure developments soon.....

http://www.judiciary.gov.uk/Resource...ross-v-sst.pdf

Plenty other little gems in there too!

Nighty night!

Last edited by Suzeman; 21st Jan 2014 at 22:14.
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Old 21st Jan 2014, 22:37
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ASIG

ASIG are looking for Passenger Service agents and Ramp agents at Manchester. as part of a new business venture.

Anyone any idea what airline this will be for?
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Old 21st Jan 2014, 22:48
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Many thanks for the update Suzeman, i'm glad you came to "broadly" same conclusions. Always value your comments !

That civil servant chappy looked as though he had just got off a bus to attend the meeting, my God talk about all a bit last minute. It really was Yes Minister stuff at times.

I also felt that Mr Davies who is normally quite calm and well collected looked very flustered almost alarmed when Manchester was mentioned !

But why, had George had a word ?

"come now Howard have a sherry, now we don't need to mention anything in the report about that airport at the end of my garden do we now"

To me it was very evident that in the light of being possibly wrong footed he tried to make light of it by seemingly trying to deviate in a comedic sense before that same MP lambasted him suggesting he get back on track sharpish.

Maybe I'm taking conspiracy theories too far BUT it all just seemed very odd !

Maybe politics were at play re the questioning but Mr Yorkshire did mention Manchester no less than 3 times and did seem to have a few detailed facts at his finger tips that he could throw in that in my view left Mr Davies somewhat wrong footed.

He gave me the impression he knew his stuff rather than it being stage managed AND he was a Tory don't forget ,so wasn't necessarily saying it just to be obtuse, I felt he believed what he was stating ?

You could feel his exasperation when they discussed Birmingham.

"so you have been to Birmingham but not Manchester...
don't you think you should have been,
that strikes me as rather odd ,
do you not intend visiting Manchester Airport ?

Instead of dismissing Manchester as a complete irrelevance as per the report he seemed very rattled that somebody should even have had the temerity to mention it !

Mr Yorkshire also suggested what I have been saying surely part of the remit of the commission was to come up with some creative thinking ....

whilst I do not disagree with RW3 quite frankly a monkey could have come up with same conclusion inside 10 minutes !

"OK lets just build a another runway in 5 years then" !

One other point, he dismissed Manchester pretty much on the basis that people in London fly twice as many times as them thar Northern folk.

How is that calculated ... just curious?

Last edited by Bagso; 21st Jan 2014 at 23:14.
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Old 22nd Jan 2014, 07:19
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Bagso

To pick up on your points:

"I am convinced I read quotes from an IFM spokesperson suggesting "we will only invest if the Stansted deal goes through". OK that may still have been at MAGs bequest but it inferred that IFM held the whip hand ?"

Quite possibly, but this is just a restatement of the terms of the deal on offer from MAG. Namely that MAG would only sell a shareholding in itself if it was successful in winning Stansted. Without winning Stansted, MAG didn't need new capital and the existing shareholders had no interest in selling purely for the sake of it - it was a means to an end. This would have been the case irrespective of whether IFM or Abu Dhabi or whoever had won the right to do the deal with MAG.

"I got the impression that whilst MAG felt the purchase was a good deal they need IFMs £1.5B to do the deal, but with the conditions being laid out by IFM NOT the other way round ?"

Yes, MAG coudn't have done the deal to buy STN without new capital from a new shareholder (or alternatively joining in a larger consortium as was proposed for LGW). So MAG came up with this clever idea to sell a shareholding in itself and use the proceeds to enable it to bid for STN. This deal structure was agreed long before IFM won the contest to buy shares in MAG. Incidentally IFM put in a lot less than £1.5bn - most of STN purchase price came from new debt.

"I "thought" they needed an airport operator to facilitate the deal !"

Yes, the terms set out by the Competition Commission required all bidders for STN to have relevant airport operating capability. But IFM could have got this in a much simpler way, rather than buying a very substantial stake in an existing operator (ie MAG), involving extensive due diligence and lots more money. The CC's criteria could have been met by simply joining a consortium which included an airport operator investing alongside them.

"I'm sure that LGW went for same figure which make STN a "bit of a dear do" now that Davies has dismissed it !"

I certainly agree that GIP got LGW at a very good price, while the £1.5bn for STN looks high. But the Davies decision has no impact - a second runway at STN would not automatically increase its value. The Davies report shows that airline charges at STN would have had to increase astronomically at STN to generate a return on investment in the new runway, and this is simply unachievable given the airport's traffic base. MAG (and IFM) bought STN on the basis of building it up to the maximum capacity of its single runway - no value was attributed to the potential second runway. And, of course, Davies has not ruled out the possibility of STN developing a second runway after 2030, and let's face it it isn't needed until then.
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Old 22nd Jan 2014, 07:43
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An answer to your last question in the 00:48 thread Bagso. A mild number crunch of UK CAA passenger surveys will give a pretty go indication of how many yearly flights per capita each region/county has. I did this crunch for the 2011 survey, and it showed clear differences more and less equal to what you said (twice as much flights per capita from London compared with Manchester). North West is far from being the worst of the regions; you need only to move to neighboring North East to find worse numbers.
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Old 22nd Jan 2014, 07:57
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The chart on p60 of the Davies report shows the propensity to fly by region. Although the figure for Greater London is very high, that for the South East is not that much higher than for the North West. And the North West does quite well in comparison with other UK regions.
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Old 22nd Jan 2014, 08:53
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The chart on p60 of the Davies report shows the propensity to fly by region. Although the figure for Greater London is very high, that for the South East is not that much higher than for the North West. And the North West does quite well in comparison with other UK regions.
These number are relative to economic activity and are hardly surprising.

As said through the regional numbers compared to the South East (excluding the GLA) are more compatible.

I would also tend to be comparing and contrasting the North West with other regions of the EU having a similar economic mix of industry/service and finance as being more useful in attaining a measure of performance. and regional demand on services

You certainly can not start to compare with London a city containing in no particular order world denizens of finance,retail, tourism and the TV/Film industries - All generating travel demand and replicated in how many other cities on the planet ?
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