SOUTHEND 5
Join Date: May 2014
Location: Westcliff-on-Sea
Age: 79
Posts: 300
Likes: 0
Received 0 Likes
on
0 Posts
Cyprus is only about 250 miles further than Lanzarote so there should be no problem range wise but would the passenger load be restricted? What about the A320Neo?
Another interesting quote from the Trading Statement:
"We are also reviewing alternative structures for our airline and leasing business that can play an important part in the consolidation of the regional airline sector."
"We are also reviewing alternative structures for our airline and leasing business that can play an important part in the consolidation of the regional airline sector."
Join Date: Jun 2011
Location: Essex
Posts: 800
Likes: 0
Received 0 Likes
on
0 Posts
Join Date: Jun 2009
Location: UK
Posts: 546
Likes: 0
Received 0 Likes
on
0 Posts
At least they are being clearer about selling the family silver to pay the dividend. To highlight the fact that they can keep paying the dividend until 2022 by asset disposal (which I dispute but that's irrelevant on this forum) merely confirms that they aren't making money from current operations.
I can't see how they work out the 22% year on year increase in passengers but irrespective the 482,000 pax over 5 months extrapolates to a maximum of 1,156,000 pax over 12 months. So how they can see their way to achieving more than double this figure (2,500,000) next year is beyond me. And 5m pax by 2022???
"EBITDA per passenger from commercial airport activities is close to the management's target with commercial enhancement activities ongoing"
Would be nice to see what the target EBITDA is however as the division is overall loss making, being close to the target matters not a jot! Profit should be the target after so many years of ownership. Targets of anything other than pure profit is daft - i.e. Which customer survey marks of out 100.
Overall very disappointing reading and suggests the results when published will be dire.
I can't see how they work out the 22% year on year increase in passengers but irrespective the 482,000 pax over 5 months extrapolates to a maximum of 1,156,000 pax over 12 months. So how they can see their way to achieving more than double this figure (2,500,000) next year is beyond me. And 5m pax by 2022???
"EBITDA per passenger from commercial airport activities is close to the management's target with commercial enhancement activities ongoing"
Would be nice to see what the target EBITDA is however as the division is overall loss making, being close to the target matters not a jot! Profit should be the target after so many years of ownership. Targets of anything other than pure profit is daft - i.e. Which customer survey marks of out 100.
Overall very disappointing reading and suggests the results when published will be dire.
Join Date: Jul 2015
Location: UK
Posts: 476
Likes: 0
Received 0 Likes
on
0 Posts
Asset disposal to fund dividend is concerning and weakens medium to long run investment value return.
I don't see a clear strategy that looks beyond short run horizons. I see lack lustre performance.
Doubt analyst advisory of buy or hold, more like a sell.
I don't see a clear strategy that looks beyond short run horizons. I see lack lustre performance.
Doubt analyst advisory of buy or hold, more like a sell.
Join Date: Apr 2016
Location: Essex
Posts: 1,236
Likes: 0
Received 0 Likes
on
0 Posts
Personally, I welcome anything that drags Stobart kicking and screaming back to reality and away from the ludicrous 10,000,000 pax pa claims. And yet sometimes, I am troubled by my own statements. Because without their wild optimism where exactly would SEN be? Who else would have chucked bucketfuls of money to develop a throwback to 1960's Britain? Keep calm and carry on, but just be sensible I say.
I fully understand what you investment savvy chaps (and chapesses -possibly) are saying, but as a premium bond man myself, I'm just trusting to luck and hoping for the best.
I fully understand what you investment savvy chaps (and chapesses -possibly) are saying, but as a premium bond man myself, I'm just trusting to luck and hoping for the best.
Join Date: Jun 2009
Location: UK
Posts: 546
Likes: 0
Received 0 Likes
on
0 Posts
Personally, I welcome anything that drags Stobart kicking and screaming back to reality and away from the ludicrous 10,000,000 pax pa claims. And yet sometimes, I am troubled by my own statements. Because without their wild optimism where exactly would SEN be? Who else would have chucked bucketfuls of money to develop a throwback to 1960's Britain? Keep calm and carry on, but just be sensible I say.
I fully understand what you investment savvy chaps (and chapesses -possibly) are saying, but as a premium bond man myself, I'm just trusting to luck and hoping for the best.
I fully understand what you investment savvy chaps (and chapesses -possibly) are saying, but as a premium bond man myself, I'm just trusting to luck and hoping for the best.
I just despair at the way in which they are going about putting SEN back on the map. The owners seem to be gambling the long term future of the airport by focusing on the vanity of pax numbers over profitable operations.
Organic growth was never an option; the owners went straight for the top prize of easyJet despite that meaning that attracting airlines 2, 3 and 4 would be near to impossible.
Reality has now hit home and the only new routes that are being launched are those being run and underwritten by the owners themselves - an absolute folly in terms of commercial sense.
But still I hope its somehow all succeeds because we need more successful airports in the UK, not less.
Join Date: Apr 2016
Location: Essex
Posts: 1,236
Likes: 0
Received 0 Likes
on
0 Posts
With my sensible head on I agree with you asdf1234. But if the organic routes (including the soon to commence domestic ones) prove viable in their own right, and the airport can announce just one more 'name' in the next 12 months then Stobart will have pulled off some trick (even if it underwhelms hard-headed investors).
I guess we will find out in the next 12 months whether or not Stobart will be given thumbs up. thumbs down, or (I do hope not) something in-between. Anyway, in 12 months' time the worst case scenario will be a sale as a going concern. Now savage Stobart as a business all you like. But if you have a current or historic link to this airport, then one day you will all acknowledge without them........
I guess we will find out in the next 12 months whether or not Stobart will be given thumbs up. thumbs down, or (I do hope not) something in-between. Anyway, in 12 months' time the worst case scenario will be a sale as a going concern. Now savage Stobart as a business all you like. But if you have a current or historic link to this airport, then one day you will all acknowledge without them........
Join Date: Jul 2002
Location: In the sticks
Posts: 9,850
Likes: 0
Received 0 Likes
on
0 Posts
Reminds me of the saying that you can lead a horse to water but you can't make it drink.
A bit like Stobart's talks with the dozen airlines they were meant to be taking to. I can't really see what more Stobart can do. No doubt the carrots are there to tempt the horse but if the horse thinks there are more carrots to eat elsewhere then they won't come.
Stobart's line has always been that London has run out of capacity but it hasn't yet and capacity continues to be added and that is part of the issue. Being the UK's second favourite airport after Doncaster does not seem to impress the airlines for some reason either. I think Southend will gradually build up its numbers but I can't see a big breakthrough airline appearing anytime soon.
A bit like Stobart's talks with the dozen airlines they were meant to be taking to. I can't really see what more Stobart can do. No doubt the carrots are there to tempt the horse but if the horse thinks there are more carrots to eat elsewhere then they won't come.
Stobart's line has always been that London has run out of capacity but it hasn't yet and capacity continues to be added and that is part of the issue. Being the UK's second favourite airport after Doncaster does not seem to impress the airlines for some reason either. I think Southend will gradually build up its numbers but I can't see a big breakthrough airline appearing anytime soon.
LTNman
Some wise words there especially the fallacy of relying on a lack of capacity at the other LON airports; somehow capacity always seems to stretch to accommodate demand. Maybe some day it will happen but I wouldn't bet on it happening soon.
It won't surprise you to know that I have some insight into part of what is happening in the background at SEN. It would certainly be unfair to suggest either that they don't put enough effort into attracting additional airlines, nor to suggest that there isn't genuine interest from a number of substantial operators. I did have high hopes that for 2018 some of this would come to fruition but the back peddling in the Stobart Trading Statement now makes me doubt that somewhat.
asdf1234
I wouldn't necessarily agree that routes being run and underwritten by Stobart are "an absolute folly in terms of commercial sense". After all they are being marketed under the Flybe brand and potential travellers will think of them as being like any other Flybe routes. There is absolutely no reason why these routes cannot succeed in that fashion any less than do the easyJet routes. They are not a vanity project and the chosen destinations, in the main, make commercial sense. I accept that it's an unusual model but it does have synergy benefits by virtue of all ancillary revenues going to Stobart themselves. Your criticism "putting pax numbers over profitable operations" should perhaps take account of those ancillary revenues.
I also don't agree that capturing easyJet from day one was a poisoned chalice as it immediately gave SEN credibility and the opportunity to prove that it was a viable proposition for a market leading airline. The alternative would have surely been to have had just a few minor routes operated by secondary airlines in the hope that someone bigger would eventually notice SEN.
Some wise words there especially the fallacy of relying on a lack of capacity at the other LON airports; somehow capacity always seems to stretch to accommodate demand. Maybe some day it will happen but I wouldn't bet on it happening soon.
It won't surprise you to know that I have some insight into part of what is happening in the background at SEN. It would certainly be unfair to suggest either that they don't put enough effort into attracting additional airlines, nor to suggest that there isn't genuine interest from a number of substantial operators. I did have high hopes that for 2018 some of this would come to fruition but the back peddling in the Stobart Trading Statement now makes me doubt that somewhat.
asdf1234
I wouldn't necessarily agree that routes being run and underwritten by Stobart are "an absolute folly in terms of commercial sense". After all they are being marketed under the Flybe brand and potential travellers will think of them as being like any other Flybe routes. There is absolutely no reason why these routes cannot succeed in that fashion any less than do the easyJet routes. They are not a vanity project and the chosen destinations, in the main, make commercial sense. I accept that it's an unusual model but it does have synergy benefits by virtue of all ancillary revenues going to Stobart themselves. Your criticism "putting pax numbers over profitable operations" should perhaps take account of those ancillary revenues.
I also don't agree that capturing easyJet from day one was a poisoned chalice as it immediately gave SEN credibility and the opportunity to prove that it was a viable proposition for a market leading airline. The alternative would have surely been to have had just a few minor routes operated by secondary airlines in the hope that someone bigger would eventually notice SEN.
Join Date: Jan 2005
Location: Not so many places currently
Age: 60
Posts: 3,793
Likes: 0
Received 0 Likes
on
0 Posts
all ancillary revenues going to Stobart themselves
Join Date: Jan 2005
Location: Not so many places currently
Age: 60
Posts: 3,793
Likes: 0
Received 0 Likes
on
0 Posts
Not at all, just most other Airports have the choice of 2 or 3 which keeps things competitive. Alot of noise about Wizzair at one point and they chop and change handlers regularly to get best price / fit for their needs. Obviously with a single supplier who has a questionable long term future, it would be bad business practice for their directors to enter into such an arrangement.
Join Date: Aug 2014
Location: Outer London
Age: 43
Posts: 604
Likes: 0
Received 0 Likes
on
0 Posts
Not at all, just most other Airports have the choice of 2 or 3 which keeps things competitive. Alot of noise about Wizzair at one point and they chop and change handlers regularly to get best price / fit for their needs. Obviously with a single supplier who has a questionable long term future, it would be bad business practice for their directors to enter into such an arrangement.