Manchester-2

[750XL]

Originally Posted by OzzyOzBorn

Hmmm. You clearly rate MAG's cargo marketing team very highly! Actually, you may have a point. Some new direction needed?

And the UK's largest airport outside London can't afford a £1m piece of equipment. Which they used to have until quite recently? Oh dear ...

You might want to do a bit more research into how airports in the real world actually operate

MAG have nothing to do with any of the ground handling equipment, it's all owned by third party handling agents... Such as Swissport, who have just announced 4500+ job losses.

[OzzyOzBorn]

You might want to do a bit more research into how airports in the real world actually operate

I've done plenty of that over many years and I've responded to you with courtesy. Is it too much to ask for similar in return?

MAG have nothing to do with any of the ground handling equipment, it's all owned by third party handling agents... Such as Swissport, who have just announced 4500+ job losses.

Well its not the booming cargo sector which has given the handling agents this headache, is it? Best to bring in some cargo business and protect jobs.

[Manchester Exile]

The obvious question in the freight debate is this: Is Manchester losing freight to airports that are *outside* of the MAG group? If the answer is no - and OzzyOzBorn mentioned at the start of the debate that freight enquiries into Manchester are being redirected to East Midlands - then there really isn't an issue. From a MAG perspective, it doesn't matter if the freight is being flown into East Midlands or Manchester.

If airlines are being turned away from Manchester and then flying to non-MAG airports, then there is a debate to be had. But even in this case, you would think that MAG bosses have done their due diligence on whether it's economically worthwhile to win new freight routes. If parking stands and other infrastructure can be used more profitably by passenger aircraft, then you have to respect that business decision.

I'm not privy to any information as to what freight routes have been lost / turned down at Manchester, so I don't know the answer to my own question. But Manchester Airport is part of a group of airports operating as a single business, so a significant decline in activity at Manchester is not necessarily indicative of a loss of revenue for the overall group.

[SWBKCB]

Before the PPE blip (and lets all hope it is a blip), wasn't the dedicated freighter business in decline? At the very least it was getting concentrated in the hands of the integrators/'parcel companies", so unless you want to invest a lot of money in becoming a hub for the big guys (like EMA has...) wouldn't you be chasing a declining market?

[brian_dromey]

Originally Posted by SWBKCB

Before the PPE blip (and lets all hope it is a blip), wasn't the dedicated freighter business in decline? At the very least it was getting concentrated in the hands of the integrators/'parcel companies", so unless you want to invest a lot of money in becoming a hub for the big guys (like EMA has...) wouldn't you be chasing a declining market?

My understanding is that demand has grown, but the main driver for increased freight demand is the loss of passenger freight capacity, which will be temporary, to some degree. The loss of passenger cargo capacity is why MANs cargo figures have declined so dramatically, so quickly, rather than a foreseeable issue with the business model.

MAN has become very dependant on passengers spending money in the terminals, on lounges and parking, fast track, etc. The refusal/reluctance to accept diversions and other general aviation and as-hoc charters has frequently been a source of frustration on the board. Scheduled passenger activity is clearly MANs focus.

[chaps1954]

As has been said before with all the new stands being built and great stretches of tarmac not available at present thing have been very difficult to say the least.
One for Ozzy a China Eastern B777 is on it`s way with CARGO

[JerseyAero]

Originally Posted by chaps1954

As has been said before with all the new stands being built and great stretches of tarmac not available at present thing have been very difficult to say the least.
One for Ozzy a China Eastern B777 is on it`s way with CARGO

China Southern en-route today - the China Eastern flights are in July.

[OzzyOzBorn]

The obvious question in the freight debate is this: Is Manchester losing freight to airports that are *outside* of the MAG group? If the answer is no - and OzzyOzBorn mentioned at the start of the debate that freight enquiries into Manchester are being redirected to East Midlands - then there really isn't an issue. From a MAG perspective, it doesn't matter if the freight is being flown into East Midlands or Manchester.

You are absolutely right that this argument is at the heart of the matter. MAG (I believe) would argue that they get to keep most of the revenue in-group anyway, so why bust a gut to maximise the potential of Manchester Airport in isolation? Of course, not all flown cargo which would be best served by MAN goes to other MAG airports (see DSA and assorted trucking operations). But the amount which does is sufficient for the narrow interests of MAG accountants to be satisfied. I suspect that this is the rationale which has been used to justify the managed destruction of Manchester Airport's capabilities in the field of whole-plane freight from exemplary in 2008 to almost non-existent now. This, and the discredited argument that competition from freighters would mean long-haul mixed passenger / cargo services not being retained at MAN. The issue of compatible stand availability derives from this: it becomes a classic 'chicken and egg' situation. MAN didn't invest in retaining cargo capability because they didn't want it for internal MAG group reasons; now it is argued that MAN shouldn't compete for freight business because they lack sufficient capability. The one begets the other in a vicious cycle.

But here is the problem. The scenario we describe above could also merit scrutiny as abuse of a monopoly position in the market. By divvying up the spoils in an uncompetitive manner between two airports whose catchments overlap, an operator's pockets may gain more coin, but the wider interests of the regions they are entrusted to serve is betrayed in the process. Is it perhaps appropriate to examine whether MAN and EMA in particular should actually be operated under the same ownership at all? Would the interests of both regions not be better served if these airports operated in open competition with each other in a free market?

We sometimes encounter a situation where the narrow interests of a business owner and the region it serves are not in alignment. This has happened more than once with regard to Manchester Airport. The decision not to expand T3 to facilitate Ryanair growth (that feels so long ago in this C-19 economy!) was a case in point. The ROI was insufficient to interest MAG's accountants, though the NW region would have benefitted from expansion to a far greater extent than MAG itself. There was arguably a case for state aid to bridge that gap, but that is another discussion, and post C-19 this debate is moot for the foreseeable future.

Returning to cargo specifically, the debate boils down to this. Manchester Airports Group can (if it so chooses) save money by distorting the market, directing cargo business to site(s) which suit them. But if they elect to do this, they disregard the best interests of the region served by Manchester Airport. Their service to business in the NW is sub-optimal, falling well short of the level the region should aspire to. Employment opportunities are not optimised which negatively impacts the wider community - maybe not specifically wrt MAG's own payroll, but certainly impacting that of other agencies working across the airport campus and beyond. The Northern Powerhouse initiative is undermined by Manchester Airport's lack of commitment to the project in practical terms.

So perhaps those with a stake in this debate divide into two distinct categories: those who believe that a marginal improvement to MAG's P&L account at group level justifies subverting the immediate interests of Manchester Airport and the region it serves, and those who believe that the potential of Manchester Airport should be optimised across diverse sectors (including cargo) to best serve the NW public, business, and partners across the Northern Powerhouse initiative.

Before the PPE blip (and lets all hope it is a blip), wasn't the dedicated freighter business in decline?

Yes, the market is smaller than it once was. But it hasn't gone away. That the market has declined from its peak is no reason not to compete for the business which remains. It is still a big market. Also, if we were to argue that it is not worth pursuing opportunities to optimise market share in a declining market, then logically we should accept that MAN should stop competing for new passenger services now. :-)

My understanding is that demand has grown, but the main driver for increased freight demand is the loss of passenger freight capacity, which will be temporary, to some degree. The loss of passenger cargo capacity is why MANs cargo figures have declined so dramatically, so quickly, rather than a foreseeable issue with the business model.

I think we can all agree that MAN's cargo throughput will recover from this recent low as scheduled passenger services with underfloor cargo capacity are restored. But that recovery will be to a level short of the already sub-optimal throughput which MAG was content to accept pre COVID-19: the freight-share left behind when all the whole-plane cargo potential has been removed from the equation. This crisis has exposed the reality that those airports which operated a diverse model across a range of business opportunities are in a far more resilient position now. The agencies working across their campuses will not be obliged to make such deep employment cuts as at those airports which have placed all their eggs in the passenger services basket.

One for Ozzy a China Eastern B777 is on it`s way with CARGO

Bring it on. More like this please. Though I hope that the need for this particular type of cargo will quickly reduce for non-aviation reasons!

EDIT: I've just been advised by an impeccable source that today's B77W flight from China is a passenger service, not a freight charter.

[GEB74]

DON'T FEED THE 'FREIGHT TROLL'
How many different profiles do you have active Bagso?? - you'll be replying to yourself again if you carry on.......
Can you not idly fixate on something else, somewhere else?? Your weird obsession is tedious and the situation on the ground WILL NOT CHANGE because you rant on an internet forum.

[commit aviation]

Isn’t that the point of a group approach? You develop synergies which deliver cost savings? If a group gets too monopolistic then the government steps in to manage that situation. That is what happened with the BAA. How small would you believe a group has to be to not be creating a monopoly? Whilst I am no financier, I have said before I presume that the local councils (who are in effect about 50% of the business owners) must be broadly happy with business approach and the returns they see in “normal times” or they wouldn’t continue to back MAG. MAN and the many on site third parties employ many of their residents whilst the other MAG airports and subsidiary companies provide a return that usually helps offset council tax bills.

Interestingly, in spite of the breakup of the BAA, I haven’t seen LHR expanding into full freighter beyond the limited quantity they already had. I appreciate they did do so for a short period at the early part of C-19 but it is not a long-term change of strategy as far as I can tell. So it doesn’t necessarily follow that MAN would suddenly launch back into freight just because they didn’t own EMA.

Whilst the breakup saw LGW, STN, LTN, LCY and SEN fight for different portions of the passenger market, the freight market in the south east appears to have changed little. I would suspect the most significant redistribution of the freight market here may have been the closure of Manston some years back.

Now you might argue that having other airport interests dilutes the focus on MAN and I wouldn’t disagree that it could however the fact that the councils collectively wish to protect their residents (e.g. votes!) is likely to see MAN interests being at the forefront of decision making. Indeed you can see that Manchester transformation has continued while Stansted transformation appears to have slowed if not stopped altogether.

I read recently that 90% of the UK’s population is within 4 hours travel time of EMA which is possibly why many of the logistics providers like it. DSA must have similar ratios and I understand your point regarding competitor airports but would you really advocate MAG landing that business at any cost?

We can at least agree that there are two distinct categories! Ultimately, we don’t have the numbers but I would like to believe that those who do, look at what is in the best interests of the group because ultimately that is likely to be in the best interests of the long term future of MAN, it’s employees and the wider community.

[Homo Simpson]

Pages of ranting about nothing!

[OzzyOzBorn]

Isn’t that the point of a group approach? You develop synergies which deliver cost savings? If a group gets too monopolistic then the government steps in to manage that situation.

Thankyou for your intelligent engagement in this discussion. Something which can't be said of all participants on this thread!

Yes, MAG would certainly argue that this is the intention behind their strategy. But the question does then arise as to whether monopolistic behaviour in the cargo market has distorted the growth which Manchester Airport specifically could have enjoyed under independent management, focused on the best interests of this airport in particular and the surrounding region served by it. At a time when a -85.9% cargo stat has shown up the fallacy of arguments used to support MAG's preferred strategy at MAN - and which leave the airport in a difficult place with its insufficiently diversified business model - this seems an opportune moment to question whether it is time to rethink and adjust course. Well-run businesses don't plough on in denial when strategic errors have been exposed; they correct past mistakes and look to make new headway in the market where they have stumbled.

the local councils (who are in effect about 50% of the business owners) must be broadly happy with business approach and the returns they see in “normal times” or they wouldn’t continue to back MAG.

Yes, in the good times I suspect they were happy to accept the dividends without delving too deeply into the strategies underlying the performance of the wider business. Indeed, I would suspect that many of our council officers would have little appreciation of the cargo market anyway, nor be aware of how badly MAN has underperformed its peer group in this market post-2008 (or of the reasons behind this). But now employers across the airport campus are making redundancies on a heartbreaking scale - those impacts ripple out through families across the community. So perhaps it is time to enquire whether opportunities to optimise MAN's freight offer to customers would help in contributing to recovery of NW business generally and the airport campus in particular.

I haven’t seen LHR expanding into full freighter beyond the limited quantity they already had.

The freighter market at both LHR and LGW airports is overwhelmingly influenced by the scarcity (and market value) of runway slots at these locations. This is a much lesser consideration at MAN, where the freight industry could more easily avoid peaks in traffic demand for the runways.

it doesn’t necessarily follow that MAN would suddenly launch back into freight just because they didn’t own EMA.

Under present arrangements, MAG can choose to manage distribution of business between MAN and EMA in the interests of avoiding investment at one site or the other. But this arguably monopolistic behaviour distorts the natural market and disadvantages businesses across the regions they serve. Under seperate ownership, this conflict of interest would not apply. How the two sites would fare in a free market environment is a matter for conjecture, but right now it is apparent that MAN's cargo capability has been sadly degraded in the period that MAG has operated both EMA and MAN.

I read recently that 90% of the UK’s population is within 4 hours travel time of EMA which is possibly why many of the logistics providers like it.

EMA offers an attractive business proposition to those in the air cargo trade. DSA too. But so did MAN until its managed decline from 2008 to date. Now they say things like there aren't sufficient parking stands for cargo aircraft ... well there used to be, and it has been a policy decision to run down that capability rather than invest to keep MAN competitive. However, MAN's own geographical location offers advantages to a region densely-packed with businesses which could benefit. This region has a need for whole-plane cargo flights in its own right - just not the capability or the will to accommodate them at airport level. THG's frustration highlights this: they've taken matters into their own hands with the formation of THG Air.

but would you really advocate MAG landing that business at any cost?

At any cost, of course not. But at reasonable cost, certainly yes. And given the market position of MAN - and its proven past track record in cargo - provision of a couple of cargo stands and associated support equipment does not seem an outrageous proposition.

Pages of ranting about nothing!

MAG has just reported a drop of 85.9% in flown cargo at MAN at a time which sees other airports thriving in this niche. This thread is the home of discussion about Manchester Airport and developments which affect it. Right now, lots of good people face redundancy based on a collapse in business - some unavoidable, some clearly not. Those affected will be interested in optimising MAN's prospects as a magnet for employment going forward.

If you are uninterested in this, remember that nobody forces you to read these exchanges. But that doesn't make the discussion irrelevant. It just means that you would be best served by reading up on subjects which do pique your interest instead.

[SWBKCB]

The freighter market at both LHR and LGW airports is overwhelmingly influenced by the scarcity (and market value) of runway slots at these locations. This is a much lesser consideration at MAN, where the freight industry could more easily avoid peaks in traffic demand for the runways.

Freight flights into LHR have boomed recently, whereas LGW has seen nothing, so there's more to it than slots. DSA, PIK, BHX, STN have seen increased traffic, but EDI, GLA, NCL, LBA, LTN, BRS, CWL haven't. So those airports with existing infrastructure to handle large freighters have seen more, and those that don't haven't - not rocket science is it?

It remains to be seen if this is a shift in the cargo market or just a blip.

[OzzyOzBorn]

Freight flights into LHR have boomed recently, whereas LGW has seen nothing, so there's more to it than slots.

Surely you recognise that slot availability is an overwhelming factor determining freighter activity at LHR and LGW? The current period is exceptional in that regard. Has LGW even been fully operational in recent times?

So those airports with existing infrastructure to handle large freighters have seen more, and those that don't haven't - not rocket science is it?

Hence my questioning of whether the wilful run down of MAN's capability in this respect, against the best interests of the region it serves, is something which needs to be reviewed. That isn't rocket science either.

[BHX5DME]

Freight

Originally Posted by OzzyOzBorn

Surely you recognise that slot availability is an overwhelming factor determining freighter activity at LHR and LGW? The current period is exceptional in that regard. Has LGW even been fully operational in recent times?


Hence my questioning of whether the wilful run down of MAN's capability in this respect, against the best interests of the region it serves, is something which needs to be reviewed. That isn't rocket science either.

MAG Group are in great position of having both EMA & STN to handle freight, so why would MAN itself be that interested in these freight flights - how much money is in these PPE flights ?

LGW has more or less been 'closed' for 3 months with no commercial flight some days, Heathrow has only been having around 100 arrivals - so slot issues there at all !

[OzzyOzBorn]

MAG Group are in great position of having both EMA & STN to handle freight, so why would MAN itself be that interested in these freight flights - how much money is in these PPE flights ?

To answer this would be to revisit issues discussed in depth in earlier posts. Have a read. Your answers are there.

[chaps1954]

If you go to Paris or Frankfurt both have reduced freight, Air France have basically pulled out of pure freight as have BA and Lufthansa Cargo is much smaller,
US freight operators have reduced. FedEx is a hub operator with Paris and to a smaller facility at STN and the same idea with UPS and DHL, most of the other freight is military.
There is no-way Manchester could handle the likes of Fed-ex, UPS etc because they have feeder services, have you seen how many flights go to EMA
to connect per night and of course they have virtually no pax flights

[Scottie Dog]

This has been an interesting discussion initiated by Ozzyozborn and it has produced a wide variety of responses. Unfortunately we now appear to be repeating ourselves and going around in circles.

It's great to see the Manchester thread coming to life and long may it continue.

Finally I feel pretty certain that Ozzyozborn is not related to Bagso - they may, for all I know, share a friendship, but there is definitely no bloodline! They, to my memory, share the same enthusiasm for Manchester, however the elegance of writing separates them!!

Have a nice evening.

[FFMAN]

Originally Posted by Homo Simpson

Pages of ranting about nothing!

I disagree. Ozzy Ozborn has raised a perfectly valid observation and the debate has been very interesting to read. I didn't know much about air freight before but now I believe I have a better insight.
Thanks to Ozzy and the respondents.

[JerseyAero]

Yes an interesting discussion indeed and some very good points raised by Ozzy.

If/when this THG operation gets underway at MAN I guess this should be the catalyst for an increase in dedicated cargo flights as obviously one of the handling companies needs to be able to carry out loading/unloading of the aircraft with the necessary equipment and staff in place.I am not sure how frequent these flights would be but assuming just a handful a week, then that handling company would surely want to attract other business if it has invested in the previously mentioned expensive unloading equipment and staff?

If what we hear is true regarding THG specifying that they want their goods shipped from/to a local airport (and not one 80 miles away just because it suits MAG) then they obviously share some of the concerns that Ozzy has raised although I do not know what stage the planning has got to with THG Air, I guess some of us will only believe it when the wheels touch the tarmac!