Prove it...
 

So there are plenty of posters who think PIK has a future, and similarly loads that think it doesn't, and the Govt should stop pouring our taxes into the bottomless pit to try to buy time.

To resolve this 'each slagging off the other' debate, would those who think it can be made profitable, confer, discuss, and agree the sources of new income, against the costs of continued operations. Once that becomes a positive number, we can debate it further; a back of a fag packet calculation would do. As Clarkson would say "how hard can it be?"

To make it easy for you, you're looking for £1m/month of revenues to begin the exercise...and we'll take it on from there.

The ultimate winner gets to be the new MD of the new PIK business model.

With 1.067 million passengers per year, a £10 per outgoing passenger 'Development Fee' would generate £5 million per year. Not much but a start.

Oh wait ..... the airports main airline does not like anyone making money from 'their passengers' so they would be off like a shot as they did at Blackpool.

Let's try and put that into perspective. The charges for PIK are as follows:
Landing Fees: £4.62 per tonne or part thereof
Parking Fees: £0.27 per tonne per hour or part thereof
Passenger Charge (International): £10.89 per departing passenger
Security: £2.15 per departing passenger, £0.50 per checked bag.

So using those figures, lets calculate the revenue from a single 737-800 at full load, each passenger carrying 1 bag, staying for 30 minutes. (MTOW 66 tonnes, 189 passengers)

Landing Charge: £304.92
Parking Fees: £17.82
Passenger Charge: £2058
Security: £406.35 + £94.50

So that's a total revenue of £2881.59 from a single 737-800 round trip flight, or £86,447 for 30 flights a month.

So to make £1m a month in extra revenue, you will need to add 12 extra 737-800 flights per day. Unfortunately though, almost no-one will pay list prices, the staff will not work for free, and various other companies will probably want a cut of that revenue, so in reality you will be looking at a lot more than that to break even.

As you can see, the main source of revenue is from Passenger Charges. A 747-400F (MTOW = 397 tonnes) would bring in just £1834, although there will be additional freight handling charges.

Also it's worth mentioning that PIKs landing fees are a fair bit lower than most others, Leeds Bradford charges £14.33 per tonne, Newcastle £6.90.

... assuming (ahem) that LCC passengers are not price-sensitive, so that an effective £10 increase in the fare doesn't dissuade any of them. :cool:

Being totally reliant on a single carrier is not a good business plan.

Ryanair will not expand at PIK; The STN flights were the big money earner at PIK and until APD is scrapped (unlikely) Ryanair won't renter the internal UK market.

Until there is a decent business class lounge, no mainstream transatlantic airline will look at the place.

So where now for PIK? The management have regularly demonstrated they are incapable of doing anything with the place and being run by a bunch of civil servants on the new board of directors will not add to the commercial insight and imagination required to turn the airport around.

Would a Yes vote on September the 18th make a difference? Maybe. Maybe not. What you can be sure of is, absolutely nothing will happen until after the referendum.

Nighthawk117

I don't doubt the figures for a moment, but I guess, and I haven't checked, so if I'm wrong, my apologies, that these are the "published rates".

As with all published rates in the business world, they reflect the charges the supplier would like to achieve, and would apply to a one off customer. However no major, let alone principal customer, is going to pay the published rate - especially not Ryanair, who know that passenger traffic wise they have Prestwick by the proverbial short and curlies.

If Ryanair were to be paying the full whack, then probably the airport wouldn't be hurting the way that it is.

As for applying a "development fee" this may be commercially feasible at remote airports, such as Newquay, but I don't think you'd see Ryanair for dust if the same trick was tried at Prestwick. They'd be off to GLA like a shot.

They are, and I clearly stated that in my post. My point is that it's a monumental task just to make up an extra £1m in revenue even at list prices. By the time you factor in discounts and expenses, it becomes even harder to overturn the current £1m a month in losses the airport is making.

Apron services charges, car parking fees, navigation charges......

What amazes me is that the charges haven't been revisited since 2012!

It will be monumentally difficult with the rumoured announcement of a FR base at GLA for winter 14.

However there must be other options to explore, what about leasing out the old Currie European as self storage? There may need to be more revenue generated from sources other than just landing charges...

Published Tariff
 

Fly Through

The published tariff is pretty much irrelevant at virtually all UK airports these days. It's probably only at Heathrow that airlines pay as per the tariff. At other airports - even Gatwick now - airlines generally pay on the basis of commercially negotiated bilateral deals.

At airports where the pax traffic is on LCCs the charges are a fraction of the published tariff, and are generally on an 'all-in' basis per departing passenger (covering the landing fee, ATC charges and passenger service charges). At Prestwick the charges payable by Ryanair probably fall in a range of £0.50 to £1.00 per departing passenger.

At such prices it's difficult for an airport to make money from pax operations, even with the commercial revenues from car parking and retail/catering etc. Historically PIK has washed its face from non-pax revenues but it seems that's getting increasingly difficult.

PRESTWICK
 

Hypnoboon, 'the rumoured Glasgow base'?? Ur rumours are?........ Why doesn't anyone back up their stories with a bit of fact? Just saying lol!

BB, I agree with you. I was just pointing out a few things that weren't included in the calculations in the post above.

As for RYR moving to GLA, isn't this just the usual posturing prior to any negotiations? No matter what deal they get at GLA they're operating costs would sky rocket and I can't imagine any expansion until APD is got rid of.

Just the stuff that was posted on the Ryanair thread.

Oddly enough I was talking to a friend that is working in the Ryanair head office, (he's usually based at Prestwick, and is pretty handy at getting info) and he reckons nothing is on the cards, or if it is, then nothing has been officially sorted yet, and initially it will be a couple of routes (if it happens)

Have to concur that sadly PIK seems to be very much between a rock and a hard place with Ryanair being the only sked pax operator. Even if APD was abolished, then surely (don't call me Shirley...) that would also apply to GLA and EDI airports? Unless of course, Holyrood &/or Brussels(!) was able to grant some sort of "EU development zone" exemption status to PIK?

My own viewpoint is that the APD scheme needs a radical review anyway, perhaps being retitled Heathrow Environmental Airport Tax (HEAT). The market at LHR could more easily absorb this tax and dare I say, perhaps LGW too?

Fly Through. You may well be right about this being a negotiating tactic - it wouldn't be the first time! As for FR's costs increasing if they decamped to GLA, well that would depend on the deal they might extract from that airport. Rumour has it that FR have a good deal at EDI, at least for those routes where they are the only carrier (to avoid accusations of discrimination). If FR can do a similar deal with GLA then their costs mightn't increase as much as you would imagine, and it's possible they could recoup this through higher yields ex-GLA as compared with PIK.

Seafire6b. I think you are spot on about the future of APD. I think the attempts to tweak it are bound to fail. The only long term solution is to recharacterise it as some kind of environmental/congestion charge and apply it only at airports with excess demand and high environmental costs (ie Heathrow).

Why would there be higher yields at GLA than PIK for FR- it would essentially be the same punters but them just going up the road

This is never going to happen under the watch of Messrs. Cameron, Osborne - and most importantly Johnson - it would really p**s off their "mates in the city".

VickersVicount - you would think so, wouldn't you. But there is evidence that (for example) easyJet get higher yields out of Gatwick than Stansted, comparing like with like. Hence their willingness to pay much higher user charges at LGW than at STN. Looking at the ground origins/destinations of PIK's pax (based on CAA survey) a lot of them are from parts of Scotland that are a lot closer to GLA (or even EDI). It's perhaps not surprising that some of them might be prepared to pay a little more for a more convenient service. Or that pax who currently use other carriers might switch to FR if they were to operate out of GLA.

ATNotts - you may well be right. But if the price of giving the go-ahead to LHRR3 is a sop to the environmentalists then I wouldn't rule it out. And HAL has been making noises about the possible need for a congestion charge on cars in the Heathrow area. As well as addressing the environmental problems it might also be used as a way of funding the extremely expensive R3. Given that Davies seems to think that some form of public funding might be required for new runway capacity in the south-east, then all bets are off as to how this is achieved. A congestion charge on cars plus a restructured Heathrow-focussed APD might be one option.

BasilBush

Thanks for that, it was the inspiration for my proposed "HEAT" fee - as HAL might say, hit 'em all! Boris already has his London Congestion, whoops, London Environment road traffic charge, and you can bet he wouldn't object to a LCY pax tax either. Call it the Lucy Levy? So now only some hurdles at 10 & 11 Downing Street then?

Trump
 

Mr Trump is busy today at EGPK,N757AF +Helicpoter.