Durham Tees Valley-7

[SWBKCB]

Would that 40 million plus not be better spent on railways,roads and social services?

To be fair to the Mayor (!), he is delivering on his manifesto commitment. Clearly taking the airport back into public ownership has a cost, and the money spent on the airport is money that can't be spent on other public services, but that's what the electorate voted for.

His argument is that the airport will generate economic activity that will generate tax revenue in the region that will cover that cost.

[oldart]

I seem to remember that KLM were thinking about having a overflow freight operation at MME. Is that still in the offering?

[SWBKCB]

Originally Posted by oldart

I seem to remember that KLM were thinking about having a overflow freight operation at MME. Is that still in the offering?

Wasn't that an urban myth?

[Robert-Ryan]

I have a tendency to buy into even the wildest of rumours, and even I find that very hard to believe!

[N707ZS]

The KLM rumour had some truth in it they were the supposed tenant for the original South side development which if it had of happened the airport wouldn't be in the current mess. When it was announced back in the eighties the local Councillor Doris Jones who we all know hates aircraft objected to large numbers of planes which they envisaged. The development was put out to government review and after two years of court cases the developer possibly Moorfield Semley won but the contracts were supposedly lost. Amsterdam residents were possibly trying to get shorter opening times at the airport so the cargo was going to come to DTVA. Something for Beafer to dig into. The plans had a cargo ramp and a four lane 747 hangar, the planes on the drawing were in KLM colours so make of it what you like.

[SWBKCB]

the planes on the drawing were in KLM colours so make of it what you like.

I remember the southside development plans, but suspect KLM's involvement is limited to the above. Did KLM even have freighter 747's in the 80's?

[Get me some traffic]

highwideandugly get real. Try getting from Darlington to either EGNT or EGNM in an hour. If I were flying from either I would allow at least 2 hours to be safe. Those airports are NOT local airports. People of Teesside are brainwashed into thinking EGNT is their local airport, IT IS NOT!! Improve public transport to EGNV, provide reasonable destinations that people want, market the airport properly as Teesside Airport and we would see pax figures approaching the 2006 levels in no time. If the labour leaders of the five councils oppose the plan they should be ditched as soon as possible. A Tory Mayor proposing a public buy back (nationisation?) is innovative. He has ditched petty party politics for the good of the region. Power to his elbow. Onion makes a very good point in the fact that the £2m loss includes loan payback. The loss should not be so high once the deal is done. Give us back our own airport, it is part of our transport infrastructure.

[Cautious Optimist]

^^ Best post ever, forum was much better back in the day when there were more like it.

Originally Posted by Robert Ryan

Let's not get excited until the councillors ratify his plan, because frankly I suspect they will not on principle regardless of whether or not they agree with it.

He only needs to convince three of them, should be doable, touch wood.

Originally Posted by SWBKCB

Did KLM even have freighter 747's in the 80's?

I don't think any architect who drew up the plans would bother researching what was or wasn't in the KLM fleet, they'd just slap a blue top and white underside on any old plane knowing they were more or less there.

Originally Posted by N707ZS

When it was announced back in the eighties the local Councillor Doris Jones who we all know hates aircraft objected to large numbers of planes which they envisaged.

I was at the press conference and she congratulated the Mayor and told him the residents of MSG had never been so depressed about the airport and had started calling it Durham Tees New Town, I nearly ripped her head off for the reason you mention, it's a shame those residents don't know just how much business she has lost the airport over the years, in fact, she's probably more guilty of it than Peel ever were (are).

[SWBKCB]

Improve public transport to EGNV,

Chicken and egg, you've got to have a critical mass of people needing to get to the airport before public transport becomes viable - unless somebody pays up front

provide reasonable destinations that people want,

Such as? Who is going to fly and to where - unless somebody pays up front

Onion makes a very good point in the fact that the £2m loss includes loan payback. The loss should not be so high once the deal is done

So paying back debt "doesn't count"? And does the deal include clearing all outstanding debts - not seen anything mentioned.

There is the £40m to buy the airport, but I've not seen any mention of the costs to turn the airport into an ongoing viable business. Aren't we just back in the same place as when the LA's sold the airport in the first place?

[Hipennine]

Originally Posted by Get me some traffic

highwideandugly get real. Try getting from Darlington to either EGNT or EGNM in an hour. If I were flying from either I would allow at least 2 hours to be safe. Those airports are NOT local airports. People of Teesside are brainwashed into thinking EGNT is their local airport, IT IS NOT!! Improve public transport to EGNV, provide reasonable destinations that people want, market the airport properly as Teesside Airport and we would see pax figures approaching the 2006 levels in no time. If the labour leaders of the five councils oppose the plan they should be ditched as soon as possible. A Tory Mayor proposing a public buy back (nationisation?) is innovative. He has ditched petty party politics for the good of the region. Power to his elbow. Onion makes a very good point in the fact that the £2m loss includes loan payback. The loss should not be so high once the deal is done. Give us back our own airport, it is part of our transport infrastructure.

Population of Teesside combined authority is just over 600k, whereas Tyne and Wear, N.Durham, and Northumberland is just short of 2m. Name another successful UK regional airport with such a low urban hinterland and within the same travel distances to competitive airports. Tesside's commercial base is a lot different now compared to the major business travelling of the days of ICI and British Steel.

Geographically, the nearest equivalent I can think of is Exeter, but the combined pop of Devon and dorset is 1.1m, it's a much longer hike to Bristol or Southampton, and it is the main base for Britain's major (for the time being) regional airline. Where is all this busines coming from?

[N707ZS]

We have been over the population discussion many times, at the end of the day its all down to price and of course advertising. Numerous flights have failed due to advertising and when its gone they saw oh I didn't know about that flight I might of liked to go!
The business flights possibility is interesting also as the mayor supposedly has many international companies interested in his other sites, there seems to be some poaching of these high yield flights by the neighbours.

[tigertanaka]

Originally Posted by SWBKCB

So paying back debt "doesn't count"? And does the deal include clearing all outstanding debts - not seen anything mentioned.

There is the £40m to buy the airport, but I've not seen any mention of the costs to turn the airport into an ongoing viable business. Aren't we just back in the same place as when the LA's sold the airport in the first place?

The headline figure in an M&A deal is normally on a cash and debt free basis, so the Mayor pays £40m less the debt in the business (which presumably will be settled on completion). At the end of last year there was £12.7m owed to "parent and fellow subsidiary undertakings" (ie Peel companies) accruing debt of LIBOR +2.25% (so about £375k). With this debt settled, the loss will be reduced by the same amount. Is this what you were both referring to Onion and Get me some traffic?

But this just reduces the £2.6m annual loss to £2.2m although the 2017 accounts show some big movements against the prior year (the £1.6m stock impairment looks a bit like a one off to me). It would be interesting to know what the true underlying profitability of the company actually is but I doubt it is losing more than £1m a year.

[SWBKCB]

so the Mayor pays £40m less the debt in the business

Does he? As he's quoting the figure as percentage of the budget, is the £40m not the money going out of the door?

And whether the airport is losing £2m or £1m, that money has to be found from somewhere, and then some more to turn it round.

[tigertanaka]

Originally Posted by SWBKCB

Does he? As he's quoting the figure as percentage of the budget, is the £40m not the money going out of the door?

And whether the airport is losing £2m or £1m, that money has to be found from somewhere, and then some more to turn it round.

Yes, the £40m will pretty much all go out of the door but will also wipe out the debt in the business. If not, the commitment would be something north of £52m and the mayor would rightly be ripped apart by the Labour councils for using a misleading headline figure.

[LTNman]

The last post says it all..with Brexit et al..aviation UK is in a bit of a kerfuffle

Not strictly true, London't airports, where there is capacity, are showing no signs of a slowdown. Not saying it won't happen so it is more to do with location than Brexit.

[highwideandugly]

London’s airports will always do well,they have the footfall.
Therein is the problem facing the likes of MME/DTV ,the population is just not there.
2 majorish airports within one hour of the airport can’t help. Yes I know the surface transport connections are not fantastic but neither is DTVs.Dont forget the passengers come from an area around the airport,not at the airport.

Look again at Sheffield, they have the potential passengers but no airport..they too are squeezed..but the economy there is still pretty robust despite the lack of a city airport?

Finally..back to the “buy out”. My understanding is that £35 million plus £5million for land was the sum agreed.
The monthly/yearly losses will have to be found from somewhere,be it 1 or 2 million.Who pays that!
Cant see any major airline players queuing up for 2019 or 2020.So that’s at least 2 years of losses to be covered?
Not saying it’s not going to happen..but I agree with others..it’s a long road ahead?

[onion]

Originally Posted by tigertanaka

The headline figure in an M&A deal is normally on a cash and debt free basis, so the Mayor pays £40m less the debt in the business (which presumably will be settled on completion). At the end of last year there was £12.7m owed to "parent and fellow subsidiary undertakings" (ie Peel companies) accruing debt of LIBOR +2.25% (so about £375k). With this debt settled, the loss will be reduced by the same amount. Is this what you were both referring to Onion and Get me some traffic?

But this just reduces the £2.6m annual loss to £2.2m although the 2017 accounts show some big movements against the prior year (the £1.6m stock impairment looks a bit like a one off to me). It would be interesting to know what the true underlying profitability of the company actually is but I doubt it is losing more than £1m a year.

That is partly it. Without looking over the accounts again I can't be accurate, but in my professional opinion they do look odd as a whole.
It is my belief that Peel have been writing down the true value of the land while saddling the airport with loans!
If I remember rightly it states that any loan going from the airport back to Peel is interest free!

[oldart]

In the days when MME was doing better, travel agents were trying to push people towards Newcastle, this happened to me twice trying to book a holiday even though there was a flight from MME.
I was told that the travel agent got a better commission from selling Newcastle flights, did anyone else have this experience?

[SWBKCB]

Experts wanted for airport deal as politicians prepare to 'get their teeth' into it

Cllr Sue Jeffrey, leader of Redcar and Cleveland Council, wanted to see the plan tested properly - with experts from Transport for the North, Peel and the aviation industry offering their opinions. The Labour leader added: "As far as we know this particular purchase of £40m is not going to buy us any new flights, it's not going to buy us any greater passenger numbers, it's not going upgrade the airport infrastructure and it's not going to provide any improvements to road and rail links - all it's going to do is buy land and buildings."

Exchanges were heated at times on Thursday as councillors mulled over what information they'd gleaned so far.

Cllr Matt Vickers, leader of Stockton Council Conservatives, hit out at Cllr Jeffrey for calling the airport deal a "vanity project" ahead of the announcement. "It seems to me to be the only thing locally the Labour party don't want to nationalise," he added.

[southside bobby]

Stobart name appears as a potential DTV operator...

May I take the opportunity then (the first of many no doubt) to suggest DTV-SEN & perhaps DTV-CAX...!!.