Teesside International Airport-1
Presume the £6 passenger duty will be going as it was one thing that Ryanair didn't like. Mayor Ben can say he has done all of his promises when the election comes around in May. Just needs a Salzburg flight to keep his fan club happy.
Wonder who is paying who for Ryanair to use the airport?
Hopefully the airport will make money out of this and can attract further business.
Wasn't the £6 terminal tax meant to go at the end of the this financial year. That's probably when the drop off charge will come in (or maybe a couple of months later....
)
Join Date: Aug 2013
Location: SW
Posts: 7
Likes: 0
Received 0 Likes
on
0 Posts
This is still good news for all regional airports during a time when consolidation will happen, and in an industry where the most cost effective option will be chosen by the airlines. Even if any future growth or stability next year will be driven by the ULCC like Ryanair or Wizz, but as with any business like airports their main revenue income will always be parking or duty free first as all passengers use these services. All airport operators at the moment will be offering anything to the airlines to get them in. As you only have to look at the daily arrival boards in all these airports to see the true scale of the impact this pandemic is having on the industry. Any positively big or small is crucial at the moment to support the recovery of this sector.
Join Date: Mar 2013
Location: UK
Posts: 412
Likes: 0
Received 0 Likes
on
0 Posts
A couple of things:
- It seems like Ryanair have signed a 7 year agreement with Teesside Airport: https://www.thenorthernecho.co.uk/ne...-flights-2028/
- Given that Ryanair are inevitably getting a fat subsidy to fly from the airport and that the mayor has committed to abolishing the £6 departure fee, there will need to be a significant ramp up in the retail/food/drink operation to drive non-airline income. I guess post-brexit, a duty free shop is a given plus maybe an expansion of the lounge.
Thread Starter
Join Date: Dec 2014
Location: North Yorkshire
Age: 35
Posts: 362
Likes: 0
Received 0 Likes
on
0 Posts
The Mayor said in a reply to his Facebook post that Ryanair weren't being subsidised whatsoever, however he boasts that he saved the airport from closure which isn't true so I guess he wouldn't think twice about telling porkies about that.
Join Date: Mar 2013
Location: UK
Posts: 412
Likes: 0
Received 0 Likes
on
0 Posts
I guess it depends on your definition of a subsidy. It would be normal for a new airline coming in to have reduced/zero landing fees for a period of time plus some financial/marketing support for setting up at a new airport. That's quite different to underwriting so many seats on each plane (as per NQY-LON) but it is still a form of subsidy.
I guess it depends on your definition of a subsidy. It would be normal for a new airline coming in to have reduced/zero landing fees for a period of time plus some financial/marketing support for setting up at a new airport. That's quite different to underwriting so many seats on each plane (as per NQY-LON) but it is still a form of subsidy.
There’s no way on Gods earth that Ryanair are coming in without subsidy in some form or other. That’s a given.
OK – so where is MME now? I’ve no inside knowledge but this is how it looks to me. It appears the Mayor’s aims where to:
1. keep the airport open, then stabilise with the aim of moving into profit;
2. increase the regions ‘global connectivity’ so as to increase the industrial base of the region;
3. for the airport to become a centre of employment, attracting skilled well paid jobs.
Where have we got to?
Stabilisation – like Cautious Optimist, I think it’s easy to paint Peel as the evil villains, and I was never convinced that the airport was going to close, but certainly the future is brighter than it has been for years and jobs at the airport have been protected
Global connectivity - keeping the airport open should retains the KLM service, which they’ve kept over the years so must be doing something for them. SOU, ABZ, BHD are all good looking domestic routes before Covid, with hopefully DUB to follow. The Loganair and Eastern duplication is baffling – can these routes really support two operators? Also, can MME support LCY and LHR, and is LHR without interlining anything other than a trophy route? Juries out on that for me - don’t forget money is also going into trains and stations as well.
Increasing employment – I think we are still in the stabilisation phase. I’ve no idea on the current levels of employment and shift patterns, but looking at the speculative schedules on the Teesside movements website, still looks like two not that busy shifts to me, so more a case of those current employed being busier/ getting more hours. There’s still potential in the southside and the Treasury campus. Also well done on the emphasis on using local firms were possible.
The downside? Well the obvious one is where is the money coming from – if airlines aren’t being paid to operate from MME, they certainly aren’t being charged much – can’t all be down to the mayor’s charm and good looks, even if there is an element of the airport bottoming out and recovering to a more natural level. Also, just looking at the place, there is many years of investment needed to just to maintain the current level. Obviously, we all actually know where the money is coming from, so I suppose the question is is there enough to get the airport to a sustainable level and what’s the opportunity cost – i.e. would the money have been better spent elsewhere?
Also – is the level of funding such that it gives MME an uncompetitive advantage, i.e. it starts to damage the likes of NCL and LBA? Believe me, I’m all for competition and also in using government money to ‘kick start’ industry, but sometimes the two don’t mix.
4 Ryanair flights depart per week @ 189pax capacity. = 756 pax
Say 85% load factor (although it's nearer 95%) = 642 pax
And say 70% arrive by car, at 3 pax per car = 150 cars per week.
Parking charge per car per week = £50.
Additional revenue = £7500 per week x 21 week season = £157,000
Additional costs = £31,000 VAT.
Extra profit = £126,000
And that's just the car parking
Disclaimer - the above numbers are just conservative estimates.
Say 85% load factor (although it's nearer 95%) = 642 pax
And say 70% arrive by car, at 3 pax per car = 150 cars per week.
Parking charge per car per week = £50.
Additional revenue = £7500 per week x 21 week season = £157,000
Additional costs = £31,000 VAT.
Extra profit = £126,000
And that's just the car parking
Disclaimer - the above numbers are just conservative estimates.
Join Date: Mar 2013
Location: UK
Posts: 412
Likes: 0
Received 0 Likes
on
0 Posts
4 Ryanair flights depart per week @ 189pax capacity. = 756 pax
Say 85% load factor (although it's nearer 95%) = 642 pax
And say 70% arrive by car, at 3 pax per car = 150 cars per week.
Parking charge per car per week = £50.
Additional revenue = £7500 per week x 21 week season = £157,000
Additional costs = £31,000 VAT.
Extra profit = £126,000
And that's just the car parking
Disclaimer - the above numbers are just conservative estimates.
Say 85% load factor (although it's nearer 95%) = 642 pax
And say 70% arrive by car, at 3 pax per car = 150 cars per week.
Parking charge per car per week = £50.
Additional revenue = £7500 per week x 21 week season = £157,000
Additional costs = £31,000 VAT.
Extra profit = £126,000
And that's just the car parking
Disclaimer - the above numbers are just conservative estimates.
Ryanair: 642 pax per week x 21 weeks x £6 airport development fee minus 20% VAT = £67,000 lost revenue (ok they never had this in the first place)
But other airlines pre-covid: 1,350 departing pax per week x 52 weeks x £6 airport development fee minus 20% VAT = £351,000 lost revenue
So the extra car parking income that Ryanair creates covers less than half of the lost cash that they are getting from the airport development fee from existing passengers. But even with Ryanair providing more throughput, the airport still needs to make £2.68 extra clear profit out of each departing passenger to break even compared to today. Cafe, bar, duty free, lounge, foreign exchange and retail will all have their parts to play.
Of course Loganair coming in will help and if Ryanair further ramp up their operations and/or run a winter season there could be a lot more passengers but the airport has a bit challenge to replace the £6 charge.
Quote.
“How much difference this will make I don't know but don't forget the airport gets 100% of any hospitality income with it being in-house”
Not quite true as will have to employ ,duty free and hospitality staff..non at moment,apron staff..just a couple at moment,increased Security,AFS and ATC ..a few still needed for increased cover? Plus I’m sure there will be other areas?
All will have to paid from the mayors purse until the revenue starts to flow in 😀
“How much difference this will make I don't know but don't forget the airport gets 100% of any hospitality income with it being in-house”
Not quite true as will have to employ ,duty free and hospitality staff..non at moment,apron staff..just a couple at moment,increased Security,AFS and ATC ..a few still needed for increased cover? Plus I’m sure there will be other areas?
All will have to paid from the mayors purse until the revenue starts to flow in 😀
Join Date: Sep 2007
Location: Durham
Age: 79
Posts: 302
Likes: 0
Received 0 Likes
on
0 Posts
There is a demand for flights from MME, all that's going to happen is, they will get back some of the passengers from NCL and LBA, that were forced to use these airports in the first place. I believe this was due to mismanagement, once the local people realise that flights are available again, the airport will hopefully start to regain some of the lost ground which has happened over the last few years. I can remember at one time the local buses had adverts on them for Jet2, maybe MME should use the same tactic now and tell the public about the new routes.