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Durham Tees Valley-7

Old 13th Dec 2018, 12:23
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Of the issues facing MME, runway length isn't one of them. The issue at NCL as I understand it is high ground off the 25 end which restricts some heavy departures.
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Old 13th Dec 2018, 12:27
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Certain engine powered A320s couldn't leave with a full fuel load off 25 due to the high ground, thus they diverted to DTVA.
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Old 13th Dec 2018, 19:17
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New road approved.
https://www.gazettelive.co.uk/news/t...round-15545959
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Old 13th Dec 2018, 22:29
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Middleton St George Parish Council objected to the plan on the basis that the link road is the only access to 1.9 million sq ft of development and is "totally inadequate for the task".
Wonder what the parish council would say if the road was built from the South end of the airfield and used the road through they're village!
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Old 17th Dec 2018, 10:13
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40 business leaders support the Mayors plan.

https://www.gazettelive.co.uk/news/t...etter-15551282
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Old 17th Dec 2018, 10:28
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Well they would, wouldn't they?

there is strong evidence to suggest that a new operator with a 21st Century outlook can make a success of it.
This is an interesting quote - is there? Where?
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Old 17th Dec 2018, 11:02
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40 business leaders support the Mayors plan.
Thought the mayors plan was still confidential.
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Old 17th Dec 2018, 13:24
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Council's response

Labour wants a 'thriving' Teesside airport - but can't back plan without knowing 'fundamental' details
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Old 17th Dec 2018, 23:40
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Is it just me, but surely at this early stage then all that can happen is that in changing owners, then a specified liability passes from one entity to another for a considerable capital sum of £x million or whatever. Irrespective as to this cost, then in theory, "the asset" DTV carry's the burden of a necessity to provide a sound and realistic chance of providing a return on capital invested to the regional councils.
Is it not simply that the backstop to all of this is that the "insurance / security" in structuring such a deal, is that if all else fails then some form of recovery of capital will necessarily need to be derived? & that can only be from the future sale of the only real asset i.e the existing land !
i.e. that for a bottom line, then all that has changed is that the organisation in charge of the land disposal would be the local authorities as opposed to a more commercial conglomerate "Peel Holdings".
One has to accept that if the transfer goes ahead, then in the short term at least, then there will perhaps be a completely different attitude as to what profile of operations is envisaged. No doubt it is seen that the way forward is to turn back around operations and attract new operators operating flights all across Europe, if not even further afield..... But here is the problem, the amount of "further" investment to take this on & drive the airport forward into a position that it can compete with it's competitors is immense.
The buildings & infrastructure are stuck in the 1980's, & the current facilities are not set up for volume. The airport is going to suck up further tens of £million's of investment just to bring it up to standard. Where does this money come from ?
However perhaps the greatest issue is that Teesside has over the past 40 years lost a vast amount of it's major industry, and taking in the general economic conditions it must be doubtful that there is a significantly large enough demand to support any DTV resurrection over the next 5 years at least. Additionally it would be naive to assume that the competition would sit back and allow any further competition attack their market without a fight, thus restricting margins obtainable on any new route development.
In all of this the sentiment is commendable, but in reality have any of the current players really got a clue, let alone the depth of experience and resource financial or otherwise to carry this through ??
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Old 18th Dec 2018, 05:03
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Skyman - spot on. The Mayor has said how he plans to finance the purchase but there has been no detail yet as to where the investment to turn round the airport is going to come from.

The Peel plan was to use the profit from the housing, but the Mayor has explicitly excluded this - so what else?

Last edited by SWBKCB; 18th Dec 2018 at 06:37.
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Old 18th Dec 2018, 05:43
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The best plan would be to develop the Southside land but as we can already see the parish councillors are already against this. Then if you do develop the land who really wants it. It all looks like a game of cards at the moment.
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Old 18th Dec 2018, 06:51
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Packed flight to AMS this morning, I counted 2 empty seats.
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Old 18th Dec 2018, 07:59
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SWBCKB how much do you actually think Peel were going to get for land with planning permission for 350 houses on it? Bearing in mind Peel would probably brought in a specialist house builder. I would say £25m would of been very optimistic.
Let's say it was, with the debts to other Peel companies and loss of £2m a year £25m would not of lasted long.
Realistically Peel would of been in no better position with the airport and all a housing development would do is eat into valuable land, create more complaints and restrict any future expansion... If Peel were ever serious at running the airport.
Peels claim that the housing would of saved the place and paid for investment in the airport is laughable.
All it ever was was the prelude to closure.
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Old 18th Dec 2018, 08:58
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MME is never going to be a large airport, we all know that. However many passengers liked the idea of a few paces from entrance to aircraft, not having to go through a maze of duty free shops and then trying to get a seat airside. Some might argue that buying in duty free is cheaper, however most super markets are able to offer similar pricing. I can't see the need to spend a large amount of money on the passenger terminal, check in and security would cope in the short term.
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Old 18th Dec 2018, 09:45
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Peels claim that the housing would of saved the place and paid for investment in the airport is laughable
Possibly, but at least Peel said where the money for investment was coming from.

I can't see the need to spend a large amount of money on the passenger terminal, check in and security would cope in the short term.
But how do you pay to keep the airport going and develop it?
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Old 18th Dec 2018, 11:06
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Originally Posted by SWBKCB
Possibly, but at least Peel said where the money for investment was coming from.



But how do you pay to keep the airport going and develop it?
I presume you mean increased flights and passengers alone would not pay for future development. TNT were here at one time for aviation freight, why did they pull out?
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Old 18th Dec 2018, 11:32
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I presume you mean increased flights and passengers alone would not pay for future development.
Yes - why do you think other airports have "a maze of duty free shops"? Passengers might like a short walk, but are they prepared to pay for it? Look at the fuss over the £6 fee.
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Old 18th Dec 2018, 13:29
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Originally Posted by SWBKCB
Yes - why do you think other airports have "a maze of duty free shops"? Passengers might like a short walk, but are they prepared to pay for it? Look at the fuss over the £6 fee.
It will be interesting to see the plan to improve the profitability, although I think the underlying losses (ie stripping out Peel's fees and one offs) are closer to £1m rather than £2m - still big numbers in any case.

However, 70,000 departing passengers a year probably raises something just under £350,000 in departure fees for the airport (deducting the VAT and assuming that 99% of pax are adults). I can't see that remaining if the mayor wants to tempt back TUI or Ryanair - so the airport would be faced with significantly lower income than today.

So how will they increase the revenue? More routes might mean more landing fees, although in order to attract new airlines, landing fees would probably have to be heavily subsidised (or even free) for the first year or so. Car parking charges are already high so difficult to see how they might realistically be increased. The duty free shop could easily be reopened but does anyone make money on selling duty free to EU passengers? (although Brexit could make selling duty free very attractive again).

Of course, more passengers would mean extra income for the cafe and lounge but the place will need a hell of a big injection of passengers (and also freight) to balance the books.
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Old 18th Dec 2018, 22:57
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Re the competition - surely the competition is who the airport will want to attract - so a TUI/Jet2/Thomas Cook or such like aircraft being redeployed from Newcastle or Leeds to be based here to satisfy the local demand - there isn't anyone that doesn't already serve Newcastle or Leeds that would fly from here, is there?

What else could there be? - Loganair Carlisle - Durham - Southend?

Back to the here and now - Eastern/Flybe Aberdeen, down to 2 flights a day Mon-Thu, and 1 flight on a Friday. Sunday flight looks to be on a based J41, up until the end of March 2019 (Humberside the same but not on a J41? and they lose the Sunday, but Newcastle who have historically been carrying a lot less passengers than both here and Humberside, keep the 3 flights a day)
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Old 18th Dec 2018, 23:10
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Originally Posted by tigertanaka
It will be interesting to see the plan to improve the profitability, although I think the underlying losses (ie stripping out Peel's fees and one offs) are closer to £1m rather than £2m - still big numbers in any case..
I think you have touched on the issue with a misquote, you can't increase profitability, as the airport has always made losses (at least in living memory...), i.e it has never been "profitable", so you have to address & stem the losses before anything else. To do this you can attack costs though there is a tangible limit as to how much of a reduction can be made.
We are thus back to the key issue that to get anywhere at all then you have to increase revenues ! as to how effective this will be will depend upon the margin achieved in doing so.
So putting it bluntly "substantial increase in revenue, at as high a margin as possible " is all that is required. I have no way of defining substantial, though for a credible business model to be put forward I'd say that this should be clearly defined, as would be a breakdown in the components so as to support the margin thrown out by the business models calculations & assumptions.
As a starter in this process you need air services & pax to support them, which leads to increase in overheads, labour, marketing are just a few items. There may be existing resource in place to support any initial uplift in pax volumes, i.e. accommodation, airfield and pax facilities & access. However I can not see that current resource will support anywhere near the number of pax required to cover all current overheads i.e. the airport would continue to accumulate losses until a critical number of pax reached.
It is not just a about quoting a pax number, as substantial capital spend would be required to expand & improve current facilities, & upon the assumption that at this point the airport is still recording losses, then you have the addition costs & problems of raising the capital required to support the necessary expansion.
With all the above to address, then you have perhaps the biggest problem of attracting air services (at any cost) to draw in the pax in the first instance.
In conclusion there is an almost impossible vicious circle to break to move any plan forward and it will necessarily require the support of heaps of speculative cash investment. This will also not come cheap as the greater the risk, the greater the cost of capital.= & so it goes on.
I really do just wonder if the mayor has a plan, or more importantly if he has is it anywhere near realistically achievable. Personally I'll repeat what I have said earlier that I don't see it as remotely achievable for the foreseeable future and that the whole project will become an ever increasing expense on the local authorities. Regretfully I can't see any viability at all and that it makes more sense to invest in transport infrastructure to support and create better access to airports already established, be it MAN, NCL, LBA etc.
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