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MAG buy STN
So MAG are the new owners. What are they like, are they able to drop fees and attract more airlines, or will they pander to FR.
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So Stansted returns to public ownership.......
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Quote: "So Stansted returns to public ownership....... "
Apparently not, according to the MAN thread. |
MAG will be 65% owned by the consortium of local authorities, so still majority publically owned.
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Not sure why we need another thread on this as its being discussed at length on both Manchester and Stansted forums. However, perhaps you can explain why you feel there is a problem with MAG being, as it will be partly local authority owned.
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What are they like, are they able to drop fees and attract more airlines, or will they pander to FR. I can't see them attracting new airlines, for a number of reasons:
Of course they will look after Ryanair - they provide 70% of the passengers!! MAG have overpaid, and overpaid seriously, for a white elephant. |
Lgs of course if this was Luton you would be posting everything positive, I & probably a lot of other people on here are rather fed up with your constant trolling. Please take your rosé tinted specs & post on the ltn thread.
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I am sitting at Manchester Airport as I write this. I use the airport several times a year and can only say that if STN ends up being run as well as MAN, it will be a vast improvement. The last time I went to STN - admittedly 5 years or so ago - it was an experience I do not intend to repeat.
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I am no expert in the field of finance, but others that do seem to have a grasp of such details say that in real terms this stacks up better than the deal for EDI.
Also as I stated to you elsewhere the deal is to a greater part financed by the part sale of MAG. But seems from what I see the facts will not get in the way of a good rant. |
NT -
If by 'trolling' you mean telling the truth, then I'm guilty as charged. I am very concerned that so much of the (then) taxpayer's money was spent developing STN when everyone could see it was an error of judgement based on BAA's lobbying, and to enhance its value on privatization. The fact that some time has passed doesn't change the fact that STN is in the wrong place, and has some serious shortcomings. It has distorted competition in the London market for 20 years, which I consider to be disadvantageous to the aviation industry. Yes, I support Luton Airport, and will continue to do so. When a new competitor springs up on your doorstep, subsidized to the hilt, and takes your business, you can't help but be concerned, and I am. If that makers me a 'troll', fine, but my arguments will continue to be made, so either get used to the idea, or, if you can't take intelligent criticism, hit the 'ignore' button. |
LGS
If that makers me a 'troll', fine, but my arguments will continue to be made, so either get used to the idea, or, if you can't take intelligent criticism, hit the 'ignore' button.
Ok give me an intelligent answer as to why BAA put up such a long and costly Fight to keep stansted ??? After all according to you it's not got much going for it ! And the people who bought it haven't got a clue when it Comes to business ! What do you think happened ? Maybe sat Round a table and thought lets buy an airport that is over priced And in the wrong place and has a bully of an airline as it main Operator ??? I really don't think so ... |
MAG buy STN
LGS
I take your earlier point, but trains into London are every 15 mins so hardly infrequent. And also at peak times at LHR you can land, hold for a stand, and in the mean time at STN you could be half way into London by the time LHR pax have reclaimed their baggage. STN connecting flights into Europe let them down, unless you want ezy or FR, you don't have much choice |
....or, this could be a very shrewd move by MAG. Given that the long term goal of Gatwick is to get rid of the smaller (domestic) operators and cater solely for medium to long haul, and no-one can afford slots at Heathrow unless you're Virgin. It could just be that STN may, in time, become the London domestic hub of the future.
I'm sorry LGS, but that Luton airport - bus - train thing is a major pain. STN is not very quick, and you have to go to Liverpool Street, but its right on the doorstep. |
LGS,
I've already had this discussion with you about Stansted being in the "wrong place" on the Stansted thread (on page 98, from post #1941). I think you should stop fooling yourself as to what you see as the "truth" and "intelligant criticism" and start being realistic and use evidence and statistical data instead of your biased and unwanted opinions, with no realistic substance what so ever. Clearly you are so drowned by your support for Luton that you feel you have to hate it's neighbour. All I can say is that in order to think so little of Stansted, you must feel what you support is threatened by this change of ownership, and like it or not, it may well be! |
With plenty of spare capacity MAG know they need to invest nothing for a few years but just service the debt.
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With plenty of spare capacity MAG know they need to invest nothing for a few years but just service the debt. Investing in marketing would be a good idea, if they don't want that ample spare capacity to remain, well, spare capacity. |
I welcome MAG's acquisition of STN, and hope that it will bring improvements across the board for passengers, staff and airlines, local businesses and residents.
I'm a regular user of all the airports that purport to serve London (except Oxford 'London Oxford', and Lydd 'London Ashford'). However, it's not often that I'm actually going to London itself; I'm more often bound for various places in the Home Counties, and choose my airport accordingly. I hope that the new owners of Stansted will recognise that the airport will benefit by becoming more of a multi-modal transport hub for towns to the north east of London; ease of access and connectivity across Essex, Hertfordshire, Cambridgeshire and Suffolk will be valuable in growing their market share. |
are they able to drop fees and attract more airlines, or will they pander to FR |
MAG buying STN
I also welcome this news. As well other members of this forum and getting a little tired with some of the contributions made by the same pro Luton / Anti Everywhere else North of the river.
As previously stated on an earlier post, I too am impressed with MAG's management of MAN and the turnaround of a run down airport. With plenty of spare capacity MAG know they need to invest nothing for a few years but just service the debt. Stansted is the worst located of the London area airports LTN - Docklands - 1 hour 46 minutes STN - Docklands - 1 hour 38 minutes LTN - Bank of England - 1 hour 19 minutes STN - Bank of England - 1 hour 7 minutes LTN - Westminster - 1 hour 13 minutes STN - Westminster - 1 hour 14 minutes It has a smaller catchment area than LHR, LGW or LTN Ground links are poor - the M11 only links London and Cambridge, and rail services are infrequent and slow New operators will be up against Ryanair Gatwick and Luton both have some available capacity Stansted will not be able to compete financially as long as it is saddled with debt I for one am looking forward to MAG joining in the competition for London Traffic. Let the competing commence!! |
Quote: "....or, this could be a very shrewd move by MAG. Given that the long term goal of Gatwick is to get rid of the smaller (domestic) operators and cater solely for medium to long haul, and no-one can afford slots at Heathrow unless you're Virgin. It could just be that STN may, in time, become the London domestic hub of the future."
Not going to happen: most domestic routes have transfer pax as well, so need to go where there's connectivity, that means LHR, which is difficult at present, maybe in the long term. For now they're at LGW. LGW is probably ill-advised to squeeze out domestic operators. It is primarily a short haul airport. If it wants to attract more long haul, it needs domestic flights to provide transfer pax. STN's future is FR and cargo, cargo, cargo. |
MAG buy STN
Yep, rumours are cargo flights could be leaving manston, and putting down roots in STN ( roots and routes) the place is a ghost town best parts of the day,bring em on
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I am struggling to find the logic of some people's understanding, in terms that MAG have bought and an Airport for £1.5 billion and now are not going to invest in the infrastructure and marketing. |
Frank
I couldn't agree with you more ref LGW. However, the reality is that domestic is being rather aggressively ethnically cleansed and ultimately they'll have to go somewhere else, if they ever want to make any money. It's my thought that MAG also knows this and are in the process of supplying a viable-ish alternative. |
Ground links are poor - the M11 only links London and Cambridge, and rail services are infrequent and slow And I'm at a loss to understand how a fast 15 minute interval train service can be described as "infrequent and slow". I use it five days a week into London. The trains are the newest of any of the airport links - built last year. |
Just take no notice of LGS. Very biased. I've had the dicsussion on the Stansted thread and all they can say is this complete and utter rubbish like that above.
I guarantee that if Luton had its own railway station with a 45-50 minutes journey departing every 15 minutes it would be great and if Stansted required bus ride but rail links were 30 minutes, LGS would still say Luton was best and majorly complain about how rubbish Stansted is for not having it's own railway station! So despite what happens, for LGS, it will always be all positive for Luton and all negative for Stansted. And I bet the M1 would be a nightmare if Stansted was on it and the M11 would be the nicest, least congested motorway if it had Luton sitting on the side of it!!! |
Overall, good research Captinbirdseye but I think you did not mean Southampton?
The change to SOU was mainly due to the financial rewards Stobarts were offering not so much due to the the direct competition from FR. |
Paxboy!
Noted and Changed!!
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£1.5 billion! What are the repayments on that! GIP paid the same amount for Gatwick back in 2009 with a much better chance of recouping the investment long-term.
Chuckles from Whipsnade! |
To all my Essex fans
daz211 -
Ok give me an intelligent answer as to why BAA put up such a long and costly Fight to keep stansted ??? 2. The profit exceeded their cost of capital, and was therefore making a contribution to the mountain of debt they took on when acquiring BAA. 3. As an airport operator, they did not wish to relinquish one of their assets, which would concentrate their overheads, and reduce their overall market strength. 4. As the regulatory framework guaranteed a certain return on capital, it could be argued that it was in their interests to increase capital employed. TOWTEAMBASE - at peak times at LHR you can land, hold for a stand, and in the mean time at STN you could be half way into London by the time LHR pax have reclaimed their baggage. FRatSTN - I think you should stop fooling yourself as to what you see as the "truth" and "intelligant criticism" and start being realistic and use evidence and statistical data instead of your biased and unwanted opinions, with no realistic substance what so ever. Clearly you are so drowned by your support for Luton that you feel you have to hate it's neighbour. All I can say is that in order to think so little of Stansted, you must feel what you support is threatened by this change of ownership, and like it or not, it may well be! Captain Birdseye - Generally a well-argued rebuttal of my points. However, you say Ryanair on the main fly to out of town airfields not airports. EZY have / can compete. The change to SEN was mainly due to the financial rewards Stobarts were offering not so much due to the the direct competition from FR. caiman27 - Utter rubbish. At the northern end of the M11 the road continues to near-motorway standard until it links with the A1. Generally - I actually welcome the acquisition of STN by MAG, however misguided I think they are. For one thing, a key UK asset will return to (largely) British ownership. Secondly, MAG would not be likely to cross-subsidize STN, as BAA did. That has to be good for the aviation industry as a whole. Subsidies, whether public or private always eventually act against the interests of the public. Free competition is more likely to determine where traffic goes, and that is good. |
To be quite frank, no one really wants to hear it mate. I have nothing else to say to you apart from this... Do you not think it's time to admit defeat with so many people against you, and no one with you on this?
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A brilliant post on the Manchester thread from Shed-on-a-Pole:
STANCHESTER AIRPORT: A Marriage Made In Essex! Greetings PPRuNeR's! I have resisted commenting on the grand acquisition announcement until now. And with good reason. I did not wish to write - in haste - a string of naughty words which would likely get me banned from here. Also, my * button is virtually worn out due to copious overuse elsewhere. And, having slept on the news, I find that the pool of blood from my slashed wrists is at last beginning to congeal. Computer keyboards and fluids just don't mix well. Thus, the time has come to (briefly) set aside the vimto and comfort food in public consideration of the prospects for this awkward marriage. The MAG deal for Stansted is fantastic news! The MAG deal for Stansted is terrible news! In fact, both statements are quite correct. From a Stansted Airport perspective the deal is fantastic news. But from a Manchester Airport perspective the deal is an unmitigated calamity. East Midlands and Bournemouth Airports have plenty at stake too; this doesn't look good for them. So this is a deal of winners and losers. For some elation, for others despair. It all depends on where you are standing and what factors best serve your personal agenda. Being a secretive soul, there is much I haven't told you folks about myself. Foremost amongst the information withheld until now is the fact that I am not actually a human being. I am in reality the progenitor of an entirely new species - the Greater Ten-Toed Sloth [Slothus Mancunianus] - a creature with remarkable abilities to survive for long periods on only vimto and chocolate, and to forecast the future. Thus armed with the two key essentials of life, I shall set forth for you some of the consequences of this deal, exclusively revealing some of the key winners and losers as we go forward. And, of course, heading the list, the biggest winner of all is our good friend MR MICHAEL O' LEARY. Whilst he is not noted for unrestrained spending on his staff, I do suspect that it will be champagne and crisps all round when he sets foot in Ryanair Towers on Monday morning. His life just got a whole lot easier in so many ways. And not just because Man City won again (astute man of good taste is our Michael). Multiple problems resolved at a stroke! Unbelievable maybe ... but it turns out that the turkeys really did vote for an early Christmas! Just look at things from MOL's point of view. In the past, whenever he wanted to ensure ultra-cheap charges from the Stansted bods he had to disrupt operations at his own largest base ... pulling out planes, dropping routes ... pain now for gain later. Inconvenient, but necessary. Now that problem is resolved. Need to make a point to keep costs low at STN? But don't want to disrupt your biggest base operation? No problem! Just pull a bunch of planes out of MAN, EMA and BOH. It hurts the turkeys in the same wallet, but inconveniences just afew of Ryanair's regional ops rather than the main London base. Bargain! And you just know MAG'll have to bend over in the end. They're not very financially astute after all ... if there was any doubt before, paying one and a half bill GBP for STN has dispelled it. And each time you need a concession, Michael, just rinse and repeat. The beauty is the simplicity of it all. You get what you want and don't have to mess up the Stansted operation any more. What's not to like? No wonder the PPRuNe Stansted fanboys are elated! MAN, EMA and BOH will be completely screw ... I mean mightily inconvenienced ... but that is MAG's problem isn't it? Just think about your future discussions with MAG, Michael. You'll be like the cocky Tomcat 'negotiating' with a wounded pigeon ... how your mouth must be watering! I'll bet you can't wait! Deep fried pigeon for dinner tonight! But hold on ... could the introduction of MAG's extraordinary team of experts attract a raft of new competition to Stansted? After all, MAG must believe that STN's previous management were a bunch of numpties ... they will be able to do so much better with the introduction of their negotiating genius. The very same genius which knocked the STN price-tag down to a bargain 1.5 Bill! Competitors will surely be flocking into the STN honeypot based purely upon MAG's astounding marketing skills ... well no other factor has changed, has it? I can just see the letters now: Dear Air France / KLM, MAG here. Your mates from Northern England. Remember us? That's right ... we're the guys who issue "No Diversions" NOTAM's just when you need us. Anyway, we've got this fantastic proposition for you. Why not fly from our shiny new airport at Stansted? Yes, its pretty close to the Channel Tunnel but don't let that put you off. And OK, its true that the most ruthless LCC in the world dominates the slots here and they've vowed to crush you into the deepest depths of Hell. But set against that the fact that we can offer you really low fees and a catchment area of afew folks who don't like trains or LHR ... it has to be a winner? Come and talk to us! Love, MAG. Dear Latehansa Group, Is that name spelt correctly? There is a guy in the office here who tells us that is how you spell your name. Please come and fly from our shiny new airport at Stansted. It's really great, and the new MAG management team here is really talented ... we're financial whizzkids. Picked up Stansted for just 1.5 Bill. We're genii ... not like the last lot at all. They were so stupid they sold this jewel-in-the-crown airport for just 1.5 Bill. How we sniggered when their negotiators left the room! We robbed 'em! But anyway, back to the point. Come and fly your planes from Stansted. Apparently, there is a small number of passengers who would consider flying from here to Germany, Belgium, Switzerland and Austria with you. All you have to do is undercut Ruinair who have pledged a price war to cast you into the hottest fires of Mordor if you set so much as one tyre down on the runway they call their own. It's an unmissable opportunity. Call us! Love, MAG. Dear American Airlines, Please fly from our shiny new airport at Stansted. It's run by MAG now, not that bunch of idiots who used to run it. They were so stupid we fooled 'em into selling cheap! Just 1.5 Bill. And that's Pounds, mate, not your cheapo Dollars, oh no! Anyway, now that we're in charge everything here is different. Remember how there were so few premium pax at STN when you tried here last time? Well, we believe that hanging the name "MAG" over the door will change all that for you! The punters will flood in. I know that you said you're now heavily invested with your partner Cockney Airways at Hounslow ... but hey, that's on the other side of London. So come on. Give us another go! Love, MAG. Dear Emirates, Your mates at MAG here. We know that you fly frequently from two London airports already, but we were just wondering ... ? Err ... OK ... but we could do you a really great deal. I mean, say we let you fly in for free? What percentage of overall costs on a premium long-haul scheduled service do our airport user charges represent ... must be a MASSIVE saving for you, eh? Come on ... you know you want to! Love, MAG. Dear E t i h a d, MAG here. Awfully sorry about hacking off your Abu Dhabi pals by snubbing their outstanding offer of investment in favour of an Australian Private Equity Fund. And after all you'd done for the Manchester area as well. But hey ... that's how the cookie crumbles! So anyway, we've got this amazing proposition for you ... Love, MAG. Dear DHL & UPS, MAG here. We've just bought a fantastic airport in Essex called Stansted. Not on the M1, but it's really brill. We'd love you to move your UK operations to it. It's a bit of a cargo specialist, you know ... bound to be better than the rubbish place you use at the moment. Where's that again? Oh ... hold on a minute ... just forget all that! As you were. Have a nice day! Love, MAG. Dear Gatwick / Luton based IT Charter Behemoth, Whilst we realise that you have massive fixed infrastructure investment in place at your current London bases which are perfectly located for your affluent South East customer base, we'd like you to consider a change ... And you'd be head to head with Ruinair who have pledged to murder you and feed your rotting carcass to rabid dogs! Call us! Love, MAG. So, Mr O' Leary ... it looks like you are the big winner. But who else comes up smelling of roses? Well, Heathrow Holdings [BAA]. GBP1.5 Billion! What a deal. Who was your chief negotiator? Give that man a Knighthood! MAG ... hire him ... please! If he can be persuaded to work for a company that just blew 1.5 Bill! Any other winners? Tough one. So who loses out, then? Well, for starters all those ratepayers residing in the ten boroughs which comprise Greater Manchester. Councillors ... don't you just love 'em? Instant experts on all topics ... civic pride to the fore ... pompous soundbites their stock-in-trade! And how the spokespeople for Greater Manchester's councils have welcomed this deal. "The acquisition of Stansted will help us to deliver maximum value for Manchester Council and the other local authority shareholders," says Sir Richard, knowingly. "This represents a good deal for local authority shareholders," says Lord Peter (who clearly recognises that STN is a mere snip at just GBP1.5 Billion). Nice words, chaps. Just one question, though. How are your plans for the post-airport dividend era progressing? You know, the bit where the money stops flowing in? It'll affect you a bit like the government cuts! What about the other airports ... MAN, EMA and BOH. Big infrastructure investments required? Dream on! Poor Manchester ... not the main focus now, eh? Which brings us to another little conundrum. Surely MAG - Manchester Airports Group - sounds far too parochial for this newly aggrandised organisation? A name change is in order! Hire expensive consultants to devise a new corporate image right now ... what's afew million to get something this important right? Some suggestions from me, though, to get the ball rolling. How about DEBTSLAVE GLOBAL CONCEPTS ... nicely descriptive and has a certain ring to it, don't you think? Or maybe HUBRIS HOLDINGS, reflecting the diversity of your portfolio? Or perhaps you would favour the new more eclectic type of name popularised by newcomers such as Moonpig and Red Spotted Hanky. I suggest WOUNDED PIGEON GROUP to reflect your status in the eyes of your largest customer. What is the upside for Manchester Airport ... this is the Manchester thread, after all. Well, not much that I can see. Infrastructure investment limitations on the airport site itself (as opposed to Airport City office blocks) ... long-term debt concerns? Please reassure me if you can! At least Manchester Airport itself will always be an asset with intrinsic value. Even if MAG withers in a future of higher interest rates, a falling pound, recession and debt service concerns, someone somewhere will always want the core asset. Maybe an investor from China, India or the UAE. The airport will still be here, waiting. We may face a five year financial 'nuclear winter' in the meantime, but the airport will still be here. Doing its job. Sidelined. Underloved. Neglected. Unappreciated. Awaiting the heroes of a new era to restore the squandered legacy of the great Sir Gil Thompson and his predecessors. Yesterday's announcement is comfortably the worst commercial news affecting Manchester Airport in my living memory. The withdrawal of BA based ops, the collapse of Intasun and XL, the Gulf War 1 downturn, the MAplc shunning of early LCC's, eco-fanaticism, recessions, industrial disputes, the decline of the package tour ... all dwarfed by this news. But MAN / EGCC will survive. It will remain a desirable asset even as it is sidelined by bonus-driven beancounters. Time for another Vimto! SHED. Waiter! Fetch the Razor Blades! |
£1.5 billion! What are the repayments on that! GIP paid the same amount for Gatwick back in 2009 with a much better chance of recouping the investment long-term.
Chuckles from Whipsnade! To repeat once again, the majority is coming from the sale of 36% of the group to IFM the balance comes from reserves and loans already in place by MAG, sorry to dissapoint probably not as much as you would like. |
The source of the funding is irrelevant - the volume thereof remains £1.5bn. An awful lot of money, I think we'll all agree.
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Manchester Evening News take
"The councils have not had to pay anything towards the deal, which is set to be finalised at the end of February. The cash has been raised through a combination of MAG selling a 35.5 per cent stake in itself to an Australian company called Industry Funds Management and agreeing a new debt package with its banks" |
Aero Mad, sorry but the funding is extremely relevant in any deal.
As above to quote the Manchester Evening News When weighing up whether a deal represents value-for-money, analysts tend to look at the purchase price as a multiple of a company's underlying profits. The £1.5bn price tag was 15.6 times Stansted's 2012 earnings. When looking at other airport deals, Newcastle sold a 49 per cent stake in itself for a reported £150m, which was 16.1 times its profits, while Edinburgh Airport was sold for £807m – 16.7 times its earnings. On that basis, the Stansted deal has been viewed as a good one from MAG's perspective by some industry commentators. |
Ringwayman - from my limited understanding, you're saying that the Manchester councils went from a 100% ownership of a company with less debt, to a 64.5% ownership of a company with more debt.
UK company law generally requires that dividends should be paid to shareholders in the same proportion of the amount of the company that they own. As an example, if you own 10% of the shares you are entitled to 10% of the dividend. I am of course ignoring things like preference shares or unusual classes of shares (e.g. golden shares which are typically held by central Govt). The cost of servicing the debt may not be negligible. As to whether 100% of 3 airports or 64.5% of 4 airports plus £1bn of cash that can be used to complete on the purchase of STN is worth more, I don't know - company valuations / m&a is not really my speciality. I am willing to accept that this may be a good deal for Manchester councils in the long term, but I would expect the dividend paid by MAG to the councils to be rather less predictable than it has been in the past. |
Thanks for the repost LGS6753, I don't read the MAN thread but please give Shed-on-a-Pole a Gold Star for a very good laugh. Like him, I am always glad to hear of news that will delight dear MoL, who has such a hard life.
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STN
IF MAG does secure any long haul flights into Stansted I bet that Emirates would be the first to arrive thus giving the airline three London airports to operate from as well as giving them a new and large catchment area, think of all those Essex folk that go to Dubai I am sure there are loads.
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So if the price is based on 15.6 earnings for 2012 there is definitely a lot of potential at STN. Pax figures have been declining since 2008 (circa 24million?) to around 17 million last year? So if MAG can turn it round and attract new business (and stop incumbent operators reducing/leaving) then it could prove to be a very shrewd move.
The decline at STN in terms of pax numbers has been pretty spectacular - almost a third of your customers in 5 years :eek::eek: You have to ask the question about the management strategy over the last few years..... A4 |
The management at STN were naive. They kept trying to make Ryanair pay money to use their airport. Silly billys.
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