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Teesside-2

Old 29th Sep 2021, 09:17
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But what you fail to see is that it is an asset, and currently the debt is £60m+ but the assets are worth £50m+ so the actual equity (difference between the two) is -£10m.
These are readily available figures.

The debt will be structured in the business plan. On top of this like has been mentioned the airport is owned effectively by the taxpayer.

Unlike a pure commercial airport where the loans by the taxpayer are often well down the list (when it comes to calls on assets if it were to go bust) there is a fixed charge at Teesside from the Tees Valley Combined Authority. Again this is information readily available.
Fixed charges basically push you up the list of creditors! So at Teesside Airport, in theory simply put the airport owes itself the debt! So with Teesside you really need to look at equity and not debt..... and before anyone say you never get the equity out when selling off assets through admin, I know, but the doom and gloom and the political point scoring is boring!
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Old 29th Sep 2021, 09:54
  #682 (permalink)  
 
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Just for clarification I am looking at Goosepool 2019 Limited as this is the owner Teesside International Airport Limited and has been identified as the finacial vehicle. Teesside International Airport Limited reports into Goosepool 2019 Limited.
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Old 29th Sep 2021, 11:45
  #683 (permalink)  
 
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August CAA stats:

Terminal passengers: 11,756 (compared to 9,390 last month, 2,529 passengers in August 2020 and 12,284 in August 2019)
  • Aberdeen: 2,722 (up 98% on August 2019)
  • Belfast City: 1,198 (best month yet)
  • Bristol: 524 (includes 79 charter)
  • Jersey: 654 (down 11% on Aug 2019)
  • Heathrow: 1,185 (best month yet)
  • Newquay: 666 (best month yet)
  • Alicante: 1,775 (1,061 in July)
  • Amsterdam: 457 (375 in July)
  • Corfu: 495 (152 in July)
  • Faro: 702 (315 in July)
  • Palma: 1,161 (1,082 in July)
There were also 1,066 transfer passengers not included in the above figures (we know that 593 pax flew HUY-ABZ with a stop at MME so the vast majority of the other 473 transit passengers must have been going to Bristol).

Aberdeen is the stand out route, August was it's best month since November 2017 and loads of 19.3 pax per flight is the best since mid 2014. Let's see what happens to the numbers now that Eastern are no longer around. Belfast continues to do well with an average 20 passengers per flight last month. Heathrow is up yet again but the numbers are still poor - anecdotally, business travel has picked up in September so let's see how this develops. Newquay was very slightly down on both last year and last month (although 2 fewer rotations in August than in July).

Amsterdam continued to struggle - 457 passengers is around 19 people per flight. Alicante was very strong especially with loads of just under 100 per flight. Twice weekly Faro is underperforming versus once weekly Corfu (which is not currently bookable for 2022).
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Old 29th Sep 2021, 14:52
  #684 (permalink)  
 
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How does the Teesside debt compare to Newcastle.
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Old 29th Sep 2021, 15:08
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It doesn’t!
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Old 29th Sep 2021, 15:14
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Newcastle debt hasn't been mentioned for some time.
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Old 29th Sep 2021, 17:06
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Last set of filed accounts show Newcastle Airport Local Authority Holding Company owing £427m!
The total equity in the business was shown as -£166m!

On the flip side the debt is being serviced and the airport made a profit in the year ending 2019 of over £7m

Most of the debt though is owed to non governmental institutions and there is the commercial interest rates to contend with. Some over 8%.

Some of the debt was restructured in 2016.

The concern here is Newcastle are in a sticky position if one of the commercial lenders go into admin and they call the loan in so to speak!
The last return I could find showed the local councils as the shareholders. So in theory there shareholding is worthless.

It is worth noting too that a £153m bank loan is to be repaid in full in 2023.
The company has pension liabilities of £12m and owes the tax man £20m odd in deferred tax (although this is legitimate tax planning)

Interesting to say the least.
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Old 29th Sep 2021, 17:14
  #688 (permalink)  
 
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Difference being here is that NCL will always be able to service its debt easier than MME as it will continue to be guaranteed pax traffic in far greater volume
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Old 29th Sep 2021, 17:38
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Possibly, but Teesside's debt isnt to commercial companies and the mayor is much more likely to write it off!
Try asking a commerical lender to write off £153m!
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Old 29th Sep 2021, 18:15
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Yes a debt write off will certainly please the majority of the Teesside taxpayer😀

£153 million to be repaid in two years will be interesting, I would guess another refinancing?
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Old 29th Sep 2021, 18:44
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The Newcastle debt is a different beast, it can be serviced from income and there is a track record of good performance (in normal years anyway). Teesside is different in that it is the speculate to accumalate, "build it and they will come" approach - there is no ssuch track record to support the investment. So a lot of money has now been spent on refurbishing the terminal etc. However, the Mayor's pitch was that any serious industrial area had to have its own airport to give business good links and to attract inward investment. I'm not sure that the money that's been spent was needed for this business orientated approach, has bothered the likes of KLM for years. He now needs the likes of Ryanair to build the throughput that will keep the bars etc busy during the rest of the day. As has been said many times the issue with the airport is the money can only be spent once - were there better uses for taxpayers money than building nice bars for Teessiders to sit in before they go on their holidays (a deliberatley cheap shot, but you get my point). He now needs to build the throughput so that the ancillary's like car parking, bars and shops to pay off the debt.

And that's just the passengers - I see in the news last week that the airport say that the southside access road will be started "in a few weeks". How many times is that now?
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Old 29th Sep 2021, 19:49
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Well I hope that they have £153m laying around as that part seems to only have its interest serviced, also as you say times have changed and the lender may not wish to refinance!

Also if the money for Teesside is written off there is still the asset and it was upto the mayor to put that money somewhere! Basically the mayors office (taxpayer) owns the airport. If it makes money they will get that money back to be reinvested in another project.

At Teesside as long as the business plan goes to plan the taxpayers will have that money back to reinvest.
At Newcastle if they paryback the loans it goes to a commerical lender and not back to the area to be reinvested!
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Old 29th Sep 2021, 21:01
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Yes, as a commercial business Newcastle don't have their own magic money tree and so have to borrow commercially, but have also been paying dividends to their shareholders - including the local authorities - over the years. The big 'if' is if and when Teesside makes a profit. And whether the best use of taxpayers money is providing competition to commercial businesses, and whether that is the best use of the big bucket of taxpayers money when there are so many other priorities on Teesside.
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Old 29th Sep 2021, 21:42
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But that's the point, Teesside is being run as a commercial business and has a business plan.

My question to you then is how is Newcastle going to pay the £153m back if lenders decide that there is too much risk post Covid?

Just so you are aware as well as I'm guessing you havent taken the time to read these accounts yourself. Newcastle Airport actually owes the councils £70m+ which between 2018 and 2019 wasnt actually paid down on either. So Newcastle have had money from a magic money tree as you put it!
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Old 29th Sep 2021, 22:38
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I am not sure I understand the issue with this using of 'taxpayers' money for the airport. The money used was funding from central government that was given to the Tees Valley Combined Authority - it is then up to the authority how that money is spent. The Mayor was elected on the promise to buy the airport - which he delivered on. He was then re-elected with a landslide victory, and so it seems to me that a majority of the Tees Valley taxpayers were quite happy with how the central government funding was being used in the Tees Valley - and of course this funding from the government has been spent on lots of other things that benefit the region, like Teesworks, Middlesbrough and Darlington station railway upgrades to name a couple - you sometimes get the impression people think all the money was spent just on the airport. Totally agree that the political point scoring it is very tedious, and also don't really understand the undercurrent that is sometimes evident that people on an aviation forum would like to see the airport fail - an airport providing employment in the aviation industry so isn't that good for everyone in the aviation community?
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Old 30th Sep 2021, 00:17
  #696 (permalink)  
 
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Mmeman you ve hit the nail on the head exactly.
Teesside are showing it as something to be repaid and hopefully it will over time but as you say the money was there to be invested and Ben was elected originally with the promise of buying the airport, which he did. He was subsequently re elected!

Teesside haven't had anymore than the northern neighbour from the taxpayer so to speak!

The employment benefits are good for everyone as the airport provides many well paid jobs and hopefully this will increase, benefiting the whole region.
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Old 30th Sep 2021, 02:39
  #697 (permalink)  
 
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As far as taxpayer money being spent on the airport goes, the more the merrier I say. But, some people seem to think money from central government is different to taxpayer money, even Ben has said as much, but surely it's our taxes that create this central pot, no?
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Old 2nd Oct 2021, 18:27
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Looks like Heathrow reduced to 2 per day until May?
Wonder if the recall of slots by BA is starting to have an effect..passenger numbers have been very disappointing?
Might encourage KLM to increase?
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Old 3rd Oct 2021, 06:30
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THE details of a brand new viewing platform at Teesside Airport have been revealed as plans show how it will take shape on the roof of the terminal building. An impressive two-storey Sky Bar and outdoor viewing platform is set to open by next summer as work will begin in coming weeks. The development, which will be open to visitors and accessible from the main entrance, will replace the outdated existing viewing platform to the right of the terminal.
https://www.thenorthernecho.co.uk/ne...ort-will-look/
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Old 3rd Oct 2021, 11:32
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Clearly this will keep the spotting community happy but is there enough demand these days for landside bars at airports? Obviously the airport expecting passenger numbers to pick up substantially but in the 6 times I have used the airport this year I have never actually seen anyone in the existing landside cafe. Surely the idea is to get passengers checked in and through security as quickly as possible in order to reduce delays (and get them spending money in the shops).
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