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Privatise the Airport

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The lack of airport finance in absolute terms is no surprise to the author of the report given to Government in 2006 and dismissed by that intellectual colossus Tony Brown as merely an academic report !

The report supported by lots of literature review, alliterates how the introduction of low cost airlines does not mean revenue from their activities per se, but rather the spin off activities are meant to support the operation as a whole. IOW airside restaurants bars and shopping are supported from the large volumes of passengers attracted by the carriers and the carriers themselves do not pay huge industry standard airport fees ! (you can certainly bet this is the case here). Clearly the IOM never fell into the beneficial category of having the passenger numbers to support an airport from the retail activities largely. (Unless of course you were one of the weak minded looking at 2.5 million passengers per year and growing by now ! ) I would have thought our management experts were fully aware of the financial implications of airport development mind you how you can be fully aware without full and detailed management accounting is beyond me !!

I quote from the now 13 year old report .....

Moreover the authors are unanimous in suggesting that airport investment should be implemented

on the grounds of addressing a demand for transportation. However it is also apparent that

infrastructure investment which encourages low cost airlines can also potentially lead to a reduction

in costs for passengers, therefore leading to induced passenger growth. This chicken and egg

scenario presents a major challenge for airport planners, as investments cannot be justified on

uncertain returns. Furthermore it has been identified that low-cost carriers do not guarantee an

ample revenue stream and therefore cannot be viewed as a large contributor to future returns on

investment. However in the correct market, a boost in airport users may also stimulate land-side

returns, viz. airport shopping.

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23 hours ago, Albert Tatlock said:

Ask a stoopid question...

Don't be silly.

This seems to have gone in the wrong direction.

I was simply pointing out that on some airlines you can check in online and get your boarding pass well in advace of the flight, Flybe being 36 hours previously, but you can't do that at the airport. Why not?

I had to pick a colleague up early doors from Heathrow and the police were going around checking why folks were in the terminal and telling some of them to decamp. But then Heathrow has hotels where you can hire rooms by the hour. Not for the usual reason but for lengthy transfers. Makes sense.

Why Albert et al think folks would actually WANT to doss down in a cheerless place like Reynoldsway, which has all the glamour of a nineteen-fifties British Rail waiting room, I have absolutely no idea. Is it even open 24/7 ?

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1 hour ago, asitis said:

I would have thought our management experts were fully aware of the financial implications of airport development mind you how you can be fully aware without full and detailed management accounting is beyond me !!

Absolutely.

Reynolds should be up before the beak to explain why her financials are a mess.

If you can't put a £number on it then it has no value. This is basic stuff.

Mind you, this is the person who didn't do anything about the scrum at security because they weren't aware that there was a problem..... Eh?

Real "hands off" management in action....

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Privatise the bloody lot.  Airport, harbours, busses, trains, in fact the lot. 

 

Governments should govern, no be landlords, manage airports, manage railways, etc and your lot, just as with ours - though privatisation over here has improved efficiency and reduce costs - are demonstrably pretty much incapable of competent government let alone anything else.

Privatise the things, even at a nominal cost providing the buyer takes on the liabilities and staff and if no buyer comes forward then either shut them down or put COMPETENT management in place, which is obviously not the case at present, with a wage based on industrial good practice of a low-ish basic component and a performance related add-on component.

It would of course require a competent person in government, I just can't bring myself to call the present shower as ministers, to manage and take responsibility for the manager which might be asking a bit much, but from the benefit of the view from a distance right now it's clearly a Buggers Muddle.

AND IT'S WASTING TAX PAYERS MONEY AND EATING INTO RESERVES.

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To drift slightly off topic, does anyone know what qualifications, or relevant experience, Nick Black has to be heading the massive Department of Incompetence. My suspicion is that the answer is 'fuck all' which may explain why he finds himself presiding over one financial and operational disaster, after another:-

  • Airport Finances
  • Cost over-run on Liverpool Docks
  • Richmond Hill fiasco
  • Promenade refurbishment delays lack of progress
  • MER/Snaefell accidents
  • Horse tram deficits
  • Horse tram rebuild fiasco
  • Financially dubious minibus service
  • Endless unnecessary new buses

Please feel free to add to this list......................

At what point, do senior Civil Servants start to become genuinely accountable for stuff like this happening on their watch........ 

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Don't know the answer to the first question above, but IoMG and its LA subsidiaries are frequently staffed by highly qualified individuals with little practical experience and low levels of common sense.

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37 minutes ago, Rog said:

Governments should govern, no be landlords, manage airports, manage railways, etc and your lot, just as with ours - though privatisation over here has improved efficiency and reduce costs - are demonstrably pretty much incapable of competent government let alone anything else.

OK Roger, this is your chance to show the huge improvement made by privatisation to, say, the UK railway system...

Don't forget to mention the stupidly complicated fare structures, the complete and utter shambles that is the timetable changes, the cost per mile compared to the rest of Europe and the rise in the accident rate due to a fall in H&S standards.

Good luck with that one!

:)

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Posted (edited)
10 minutes ago, P.K. said:

OK Roger, this is your chance to show the huge improvement made by privatisation to, say, the UK railway system...

Don't forget to mention the stupidly complicated fare structures, the complete and utter shambles that is the timetable changes, the cost per mile compared to the rest of Europe and the rise in the accident rate due to a fall in H&S standards.

Good luck with that one!

:)

The BIG one is that the users pay, not the tax payers.  It's bad enough that tax a payers have to subsidise the operating companies but at least Spanish Practices have all but been eliminated plus there's been huge improvement of the rail network.  In Europe governments massively subsidise the rail service so lower rates for the users.  That just ain't right.

You and I are on opposite sides of the spectrum where political ideology are concerned.  I totally support small government and the free market in all things.

Edited by Rog

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It would appear to me that most of our problems have arisen from privatisation and outsourcing. Far better to pay a baggage handler 40k a year, that may get spent in the manx economy than a company 39k a year, which they will pay a baggage handler 20k a year to spend in the manx economy. 

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Whatever your politics the basic premise here is the same, someone (in our case taxpayers) pay the salaries of "top" managers in the field to oversee the running of an airport ! Clearly the running has been reported as leaving something to be desired ! in which case politics aside questions need to be asked !

 

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On 7/11/2019 at 8:55 AM, bankerboy said:
On 7/11/2019 at 1:30 AM, Roger Mexico said:

(Incidentally I'm not sure to where that last sentence about the fall in income refers to by 'later'.  Any ideas?)

Roger, reading between the lines, I suspect it is linked to variable yields from EasyJet,  

On reflection, I'm not quite sure it is.  The report is referring specifically to the fall in 2017/18 from the previous year.  The variable yields are indeed something worth looking at, but as your longer quote illustrates that's a longer term thing over a decade, as easyJet increased their share of the market.  The change between 2016/17 and 2017/18 was only around a couple of points - they were already around 40%.  Unless there was a further downward negotiation of per passenger charges to easyJet it doesn't explain the big drop in income from  £5,690,949 to £4,864,507 between those two years.

In fact I'm not sure what is going on in table 3.1 at all.  There's also a substantial drop in the payroll (£8,465,259 to £6,447,884), presumably because of the privatisation of the security and baggage handling[1], but also a fall in in Supplies & Services from £2,164,708 to £1,704,30, which you would expect to rise if they are paying directly for the privatised services.  But if the airlines are paying directly for these services, then why does it say the per pax charges haven't gone down?  And why does it say elsewhere that the Airport is paying for the extra security staff if it is now between the airlines and Menzies?  

Thinking about it, I wonder is the DoI insisted on York Aviation dropping the paragraph that explained it all before the report was finalised - rather than redacting it because then presumably at least some politicians would see it.  As with so many government reports it's what not there that is most informative - and in this case there's a lot.

 

[1]  The 2016/17 figure is very high historically and I wonder if it includes redundancy costs.

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I appreciate the detail however in my simple mind the discussion is a little neater.

1. Do we need an airport?

2. Assuming we do, do we have the PAX numbers to make it a commercial success?

3. If we do, crack on and let an experienced operator take it over. If its capable of profit, there'll be a queue.

4. If we don't then the operation has to be funded by the taxpayer.

If the taxpayer funds it, then there's no reason at all why the operation can't deliver on all the points in the report.

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17 minutes ago, Roger Mexico said:

On reflection, I'm not quite sure it is.  The report is referring specifically to the fall in 2017/18 from the previous year.  The variable yields are indeed something worth looking at, but as your longer quote illustrates that's a longer term thing over a decade, as easyJet increased their share of the market.  The change between 2016/17 and 2017/18 was only around a couple of points - they were already around 40%.  Unless there was a further downward negotiation of per passenger charges to easyJet it doesn't explain the big drop in income from  £5,690,949 to £4,864,507 between those two years.

In fact I'm not sure what is going on in table 3.1 at all.  There's also a substantial drop in the payroll (£8,465,259 to £6,447,884), presumably because of the privatisation of the security and baggage handling[1], but also a fall in in Supplies & Services from £2,164,708 to £1,704,30, which you would expect to rise if they are paying directly for the privatised services.  But if the airlines are paying directly for these services, then why does it say the per pax charges haven't gone down?  And why does it say elsewhere that the Airport is paying for the extra security staff if it is now between the airlines and Menzies?  

Thinking about it, I wonder is the DoI insisted on York Aviation dropping the paragraph that explained it all before the report was finalised - rather than redacting it because then presumably at least some politicians would see it.  As with so many government reports it's what not there that is most informative - and in this case there's a lot.

 

[1]  The 2016/17 figure is very high historically and I wonder if it includes redundancy costs.

But isn't security paid by the airport (which then levy an onward charge to the airline per PAX, if at all) ? And baggage handling and apron services charged direct to the airline?

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1 minute ago, Andy Onchan said:

But isn't security paid by the airport (which then levy an onward charge to the airline per PAX, if at all) ? And baggage handling and apron services charged direct to the airline?

I don't know is the answer.  But the figures don't really make sense either way.  If that were true and the £2 million drop in payroll includes security then services should have gone up.  I suspect there a tremendous mess being covered up here, arising from poor management and badly-drawn up contracts.

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