Wednesday, 2 August 2017

Is reopening Manston as a freight hub a viable option



During the last 15 years every owner of Manston has tried but failed to make a profit from the freight business and despite money invested business has failed to take off (pardon the pun). Infertil Limited purchased Manston from the failed EUjet/Planestation/Wiggins group in 2005 and over the next 9 years invested £40-£50M and still failed to turn a profit. They threw in the towel and asked Price Waterhouse Cooper to find a buyer and in 22 months NOT ONE buyer from the aviation world came forward. Eventually they sold it to Ann Gloag’s Lothian Shelf for a £1 and all the debts.

What is airfreight and what is carried is a question asked. Airfreight is exceptionally expensive (unless subsidised by being carried in the belly of passenger planes) compared to road freight and cargo ships. So it is reserved for expensive “just in time” goods such as electronics and pharmaceuticals, and low value flowers and vegetables from 3rd world countries where “time is of the essence”. 

During those years airfreight at Manston has only managed 1%-2% of the total UK airfreight business. 


 To put this into context total freight in the UK is around 500 Million tonnes and airfreight is a miniscule 2.3Million tonnes (1/2 of 1%) and Manston achieved at its busiest 32240 Tonnes (1.38% of airfreight, .006% of Total freight)
Manston has tried and failed to attract the dedicated freighters which are handled more efficiently at freight Hubs such as East Midlands, Stanstead, Luton and latterly at Southend all of which have spare capacity both now and into the future. “...The London Airports together currently have 40-50% spare capacity available”. In 2016 Heathrow brought in 65% of all airfreight (95% in the belly of passenger planes) leaving just 835000 tonnes for every other airport in the UK to share out. RSP propose to take 500-600 thousand tonnes (That is 72% of the available freighter market) and that from a standing start.
The question then becomes why are those airports much more successful in attracting the freight business and why hasn’t Manston managed in the last 15 years? The answer is geography. Any freighter bringing in cargo has a choice. Land at Manston 60 miles away from the M25 and negotiate the Dartford river crossing or add 10 minutes flying to Stanstead or Luton or 15 minutes to East Midlands where there are major motorway links, Road links and central distribution hubs to complement the airports. I have ignored Heathrow as has RSP as the cost of transhipping freight is subsidised by passengers which is why 65% of all airfreight goes to Heathrow.
When Manston was operational they handled about 2 freighters a week sometimes less, mainly African produce and it is hard to see how they would be able to attract business unless they cut the landing costs again which seems to be the only way they could attract business. Listening to those that worked there it becomes apparent that most freighters left empty and without refueling because there were airports with export freight and cheaper fuel.
There is a series of reports by Dr. Sally Dixon which paint a far more upbeat prospect for Manston however this is based on World Wide expansion of freight which doesn’t relate at all to the UK which at the time of writing has achieved 2.3 Million tonnes of freight consistently for every year from 2007 to 2017. Dr Sally Dixon believes that much export freight is loaded into Lorries and goes out of the country to the near continent to be loaded onto aircraft. The report explains this by saying there is a lack of freight capacity in the UK which is complete nonsense. (See above). Since 1999 there have been many promotional forecasts, the only consistency is that they all failed to achieve what they promised.

Actual best year was 2003 at 43000 tonnes

In 2010 Freighter Air Transport movements (ATM’s) totaled 51000 and by 2015 this had increased to 55000 movements and increase of 1.5% per year. The Department of Transport forecast this to grow to 60000 movements by 2050 which equates to just ¼% per year. In other words it will be flatlined for 35 years and this may even be optimistic if more cargo is shipped in the belly of passenger planes.

"The UK demand for all air freight remained flat from 2003 to 2013, furthermore, the UK totals for 2015 (2,299,000 tonnes) and 2016 (2,385,000 tonnes) confirm that pattern has been maintained over at least the last 13 years. The contribution by Manston showed no growth and hovered between 1.2% and 1.5% of all airfreight. It was a minor player in the freight market throughout its operation.

 CAA statistics show the split between the quantity by weight of incoming (known as ‘set-down’) and outgoing (‘pick-up’) cargo. It shows there was a highly skewed imbalance in favour of import over export tonnage.

 99% of freight was carried by non-UK operators.
 92% of freight was set-down
 7% was pick-up
This imbalance would have severely affected the efficiency and profitability of carriers. This picture suggests that there was a lack of UK market demand to ‘export’ freight by air from Manston or that other operational factors were having an impact.
In 2013 the airfreight handled at Manston was 29,306 tonnes. Analysis of CAA statistics shows this was carried via 511 dedicated freight aircraft ATMs. On average therefore each ATM accounted for
57.4 tonnes of cargo. On the assumption that there are equal numbers of inbound and outbound ATMs it is possible to derive the average payload of each given the recorded set-down and pick-up tonnages. On this basis the average ‘set-down’ payload was 106.4 tonnes; and the average pick-up payload was a mere 8.5 tonnes. In other words set-down aircraft were arriving heavily laden but, in many cases, departing empty." * report by The Ramsgate Society

What about the planes used to carry Freight

"The freight ‘workhorse’ Boeing 747-400F requires a take-off field length ranging from 9,250 feet to 10,950 feet (depending on range, payload and overall weight). This poses a serious problem for the future of Manston with its runway at 9029 feet in length. While it may be sufficient to land fully laden aircraft it is not capable of handling this market leading freight aircraft at maximum take-off weight. This puts Manston at a considerable commercial disadvantage compared to its competitor airports in the UK. Manston ranks only 11th in terms of the length of runway in the UK, and behind leading
dedicated freighter traffic rivals East Midlands and Stansted. It makes it unattractive to air freight operators. The relatively short runway explains why, historically, there has been very little pick-up tonnage over previous years of operation undermining efficiency and contributing to a lack of any profitability."
So understand this we need to understand that most flights to Manston were full and most flights out were empty. In 2013 this for reference, there were 511 air freight ATMs at Manston, accounting for 29,306 tonnes of freight. The 747-400F can carry 105 tonnes so assuming most were full 300 flights either landed or took off with an average load of 95 tonnes.
The total annual UK weight of cargo carried by dedicated air freighters 715,000 tonnes (at 2016 levels source CAA);
Therefore assuming by year 6 RSP (Sally Dixon's figures) 10000 ATM's will be reached and assuming every flight landed full and left empty then by 2016 Manston would achieve a total tonnage of  475000 tonnes which is 2/3rds of the total tonnage of dedicated freighters. Absolute rubbish.
 The Ramsgate Society has done extensive research into Manston and its problems however what seems to come out of this is someone is embellishing the true position. If you look at Sally Dixon's figures below they envisage a freighter carrying an average of  18 tonnes of cargo whereas a 747-400F can carry 106 Tonnes an absolutely massive difference.

The last point which will put the final nail into this coffin is the cost of reinstating the airport. Various figures have been bandied about but according to Dr. Beau Webber this is around £300M. As an accountant and Financial Adviser for more than 25 years this business model will make the airport noncompetitive and inflexible because this amount will incur repayments of both Capital and Interest costs which landing fees and ancillary business will have to cover before running costs. As an example check out the Channel Tunnel which had similar issues and escaped from its financial dead weight by going bankrupt.

FYI Julian Eagle

Is this the level of debate that gets your ego stroked then Julian?

There is an advantage of living where I do. Red Arrows performing at the end of Cowes week


31 comments:

  1. I trust this excellently researched evidence will be presented to the inspectorate, if a DCO application is ever made.

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    1. Dr Dixon is a PhD from Cranfield University and is a aviation specialist. All of her work has been peer reviewed. Her work was presented to PINS at the P.I. and was described buy Mr. Nunn (the Inspector) as "compelling".

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    2. Sally Dixon does what the client wants and pays for. Avia had the same information and said that opening Manston would get the same result. She isn't an aviation specialist at all she has NEVER run an aviation business so expert she isn't. Peer reviewed by whom BTW?

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    3. BTW CAA says airfreight in UK has flatlined for last 10 years, I wonder why Sally didn't include that figure?

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  2. So RSP say they have the funds in place, will this show up in their accounts or will they have letters of intent from investors?
    The owners of Discovery park have sold up to concentrate on SHP, does that mean they have the money in place to develop SHP or again will they be looking for investors?




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    1. SHP lost £42 million on their last project (Wynyard Park). The company was wound up by Musgrave as "not a going concern" with the losses being absorbed by the "lucky" group, they the spent about £10 million buying Manston. Discovery Park is an asset and was unfinished, company's only sell their assets when they run out of liquidity and can't get a loan.

      RSP spent £450 on the PINS appeal and have spent £2 million so far out of the estimated £6 million required for the DCO. Dyson Bell have a 100% success rate with DCO's this is DCO number 17.

      Debate is always welcome, but nobody is putting any money on the above blog, which is just that and not a peer reviewed research document produced for a £300 million project to create the most advanced airport in the world with no requirement for scheduled night flying.

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    2. Julian as a member of the public would you care to post your qualifications seeing as you want to trash mine I'd like the same chance as you have been given. Can you make sure the qualifications are verifiable Thanks. Also I suspect RSP paid a lot more than that at the "PINS Appeal". Also can you post the verifiable proof that RSP have spent any money on this jaunt and just where there money has come from Thanks. Throwing out one liners is easy but not so easy to show the proof CAA figures are for you to look at however if you cannot do the maths then I'm afraid I cannot help you

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    3. Barry, sorry, that should be £450k. Rough checks based on experience of the cost of team of commercial lawyers including a QC should allow you to accept T.F's account of the cost which is available online on the Suma website.

      With reference to the above blog,you seem to have missed or ignored the thrust of Dr Dixon's argument which is, that the cargo demand is not in the air; it is on the roads, because all the airports in SE England are either capped or at capacity causing freight for the UK to be delivered in Frankfurt or other European airports and driven here. All of the data for this is available on the RSP website "documents page" in the form of the Azimouth Associates Reports which are peer reviewed and open sourced (unlike the Avia Report which is not peer reviewed, does not disclose many of it's sources and has and disclaimer saying that it "must not be used for planning purposes") along with the post Brexit cargo expansion numbers). Please note that Heathrow accepts belly cargo, not cargo freighters as Manston will do.

      You are correct in your assumption that I am "just a member of the public", it is not me, however that is criticising your submission (so don't worry about me), it it you who are criticising Dr Dixon's submission as presented in " Manston Airport, a regional and national asset, volumes 1-5" so I suggest, therefore, (as you are confident enough to put your work into the public domain), that you contact Dr Dixon and ask her to peer review your work in the same way that she put hers up for open review. Then let Dr Dixon comment here.

      Finally, (while you are arranging that) I would like to mention common sense; why do you think that a consortium of venture capitalists (specialists) are planning to do this? to loose money? Why do you think that a firm of DCO specialist lawyers with a 100% 16/16 DCO success rate took on the project, because they expect to loose? Think about it!

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    4. Not want to answer as to your qualifications yet feel qualified to trash two separate reports based on facts readily available from the CAA. Sally Dixons says peer reviewed yet this is the person who wrote up Infertil's report which failed to help the sale by Price Waterhouse for 22 months. Sally Dixon's report has its own disclaimer so hardly unusual.
      CAA figures show Airfreight in the UK has flatlined for 10 years, easily checked yet Dr Dixon doesn't mention this.
      67% of that airfreight is Heathrow's belly freight and was mentioned then ignored as Freudmann already said that wasn't the market he was after.
      East Midlands, Stanstead and Southend are not capped as they state on their own websites which you should take a look at because they directly contradict Sally Dixon's accounts. Also nowhere in her report does she provide any proof of freight going across the channel to european airports.
      Sally Dixon can post on here should she so desire however as she is unlikely to be paid for it I suspect she will not bother.
      I do have a degree in accounting and can think of several reasons why this consortia is interested however none involve running an airport.
      There is a reason for hiding the ownership of RSP in Belize, I'm sure that in the fullness of time this will become apparent LOL

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    5. To recap: you have said (on Twitter) that UK airfreight has "flatlined" when the evidence for post Brexit growth all aviation is common knowledge, I have supplied you with just one piece (that you have ignored) other evidence is legion with more coming almost daily.

      You have said that Dr Dixon's work is partisan and "a stitch up"; this reveals that you do not understand the purpose and method of peer reviewing which, since time immemorial has been used to vet all research and prevent that very occurrence (Avia was not peer reviewed and also has been considered and rejected by PINS).
      You ask "why did Dr Dixon not address" your fictional view of "flatline" demand when the whole thrust of her cargo analysis addresses that very issue, so you clearly have not read her work.

      Thank you for telling me that you are an accountant and not a aviation Phd from Cranfield business university, like the aviation specialist whose five volumes of work you feel is threatened by your one page blog.

      As you are not appropriately qualified in aviation matters an your argument has just been undermined by on page from Lloyds Loading List I will leave you to carry on misinforming the Thanet because you do not qualify for peer reviewing.

      END

      PS I have not undermined the Avia Report Dr. Dixon, Mr Nunn from PINS and events have done that,so I suggest that you take the matter up with the, I will let events be your judge.

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    6. Julian Eagle The specialist DCO firm have only won when their clients have told them the truth with Freudmann at the helm and the tricks he has been upto the DCO crack team of Lawyers will be coming unstuck and if at the eleventh hour or before don't pull out the application( that hasnt really started jet) it will be a number one fail for them.HD.

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    8. I see Mr Julian Eagle has posted your blog on Smaa, Barry James. Let the personal attacks begin. The usual suspects who cannot debate. I'm thinking they are a little jealous that you have a working airport in Southampton and they don't, shame lol. Talking about your involvement on Manston from Southampton don't they have supporters who do not live in Thanet, like Roy Davies who lives in Yorkshire.

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    9. Julian I note that the replies from the same suspects on SMAa are just personal attacks and not debates still if you feel that a group with just supporters vindicates your virtue and massages your ego then all I can say is thanks for posting this blog to a wider audience.
      Now to some reality, which you find difficult to accept, the blog is made up of research by me and also the Ramsgate Society. Together we came to the same conclusion RSP aren't playing with a full deck. Sally Dixon used statistics to produce a result that met the needs of her clients. They have already apologised for the misleading jobs totals and although you have again said she is an aviation expert you have failed to produce any evidence that she has ever run an airport.
      The "evidence" for aviation growth is just that and does not relate to 1. The UK or 2. Airfreight. It is based on a report by Boeing which relates to worldwide passenger growth.
      I have posted the CAA evidence which is correctly identified in my portion above and also correctly identified by "The Ramsgate Society" However what SMAa and you have difficulty in is accepting facts which don't link to your dreams of planes flying again.
      I do however appreciate your efforts to increase the knowledge of those in SMAa however as I'm sure you know they really aren't interested and further some of their bully boy tactics leave a lot to be desired.

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    10. Julian Eagle if that is your real name why do you persist in flogging a dead horse. Looking at the standard of debate on SMAa you are preaching to the hard of thinking.
      I note you make a comment about Barry not understanding about "belly cargo" however I rather think it's you that doesn't understand. Fraudman already stated he wouldn't be competing with Heathrow so what part of "not competing" is it you do not understand?

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    11. "you have said (on Twitter) that UK airfreight has "flatlined" when the evidence for post Brexit growth all aviation is common knowledge, I have supplied you with just one piece (that you have ignored) other evidence is legion with more coming almost daily."
      You call this common knowledge when Brexit hasn't happened and no one knows what this will mean for import or export business. To rely on "evidence" from RSP is ludicrous in the extreme but I suppose someone has to when they are clutching at straws.

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    12. Barry, Your data (FYA JE) is five years out of date, what part of post Brexit (referendum) do you not understand. Again you have revealed that you have not bothered to read the material that is publicly available because the RSP plan is staged over 15 years with the phase 1, 9 aircraft stand development costed at £25 million so your data is out of date and accordingly biased.

      I am sorry Barry but if you cannot be bothered to read the material I can't be bothered to debate any further

      Julian

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    13. Richard 10:08 - this is horrifying that TDC and pout councilors and Gale/Mackinlay are allowing such pollution. Which of them have made a public statement? If not why not? and when will they?

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    14. Debate Julian you are having a laugh Total Airfreight 2016 2.38M Tonnes. Total airfreight 2012 2.30M Tonnes. Total airfreight 2006 2.31M Tonnes. As someone said earlier should have gone to specsavers. At least make an effort and read the blog post.
      In case you haven't realised the difference Sally Dixon's figures are a FORECAST you will only know the truth if the DCO succeeds there are no guarentees. The figures I posted are actual figures based on truth unlike Sally Dixons.
      As I posted earlier can you manage to post a bank statement with the actual amount in RSP's bank account or is that a fairy story as well.

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  4. If the NPI are intrested in What RO are upto and that time comes then they can have a chat to me or I could put it in black&white for them as for them to come to the conclusion

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    1. They could only do that if they know who you are

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  5. We can't at the stage give any hints we don't want to aleart RO as to have them act differently which would affect a law suit we are looking into our appolgies Mr Card at this time but please be assured all will become clear when that time is right.

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  6. You are a complete idiot Julian and you should have gone to specsavers. Your comments on that insular Manston group are complete lies and if you had read Dixon's reports you would have known she also posted a disclaimer. Moron

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  7. If the airport is a dead duck and Riveroak are only in it to build houses can I just ask why there is such a fuss being made by the usual suspects? If you are so confident it won't work then you only have to sit back and watch it fail.
    Unless of course you are worried that it will succeed and therefore all your negativity and scaremongering is just that?
    What is it Barry?

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    1. Whoever you are this DCO is holding back development of the site and is damaging job prospects in Thanet.
      An example of this is when Ramsgate Airport finally closed in 1969 with the loss of 29 jobs. Pysons replaced it with a gain of over 200 jobs.

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  8. Hey crutchless why are you whining about not being able to post, we all can. Was it something you said LOL

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  9. Mr Julian Eagle if you are hoping for a sensible debate on Smaa I'm afraid you can forget it. The likes of Toy and Vince Francis have not got a clue. They resort to childish name calling. Vince Francis has no debating skills. He resorts to his usual 'toilet roll' jokes. I think it's him that needs them as he seems so fixated on Mr James. Smaa will never be taken seriously if that's all they can come up with, personal attacks.

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  10. "With reference to the above blog,you seem to have missed or ignored the thrust of Dr Dixon's argument which is, that the cargo demand is not in the air; it is on the roads, because all the airports in SE England are either capped or at capacity causing freight for the UK to be delivered in Frankfurt or other European airports and driven here."
    Did you read Dixon's fairy story Eagle? If so you are a muppet that isn't what she said. I would suggest that you get your little grey cells to have another look. £450 LOL

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