Tory Transport Minister John Hayes’ cavalier announcement yesterday that he is “satisfied” by the indemnity offered by RiverOak, to protect the council against the costs of a CPO on Manston Airport is an embarrassing bit of electioneering.
It is—coming via a press release from Sir Roger Gale—also potentially misleading.
The minister has simply received more assurances from RiverOak that it will provide cash to safeguard TDC from the legal procedure of a CPO process. This is not, repeat not, offering the money for a CPO itself, which is what TDC needs to be shown.
The compensation costs (likely to be substantial) would also need to be met. How RiverOak could do that remains deeply unclear.
With one businessman involved in the introduction to RiverOak having been accused by a High Court judge of being a liar and another purportedly trying to be involved having this “colourful” history, confidence can hardly be high. Nor does current leadership inspire confidence.
As the new owners rightly highlighted in a letter to Sir Roger:
The River Oak (UK) website has an aviation section listing the managing director as a Mr Freudmann, who according to his own biography was Chairman of Planestation… We find it very interesting that River Oak’s only aviation experience from what we can glean is the involvement of a man who oversaw the demise of the airport…
The government’s announcement meanwhile that the PwC report will only be available after the election is clear can-kickin.
PwC, no matter how much of our money the government puts in their pocket, are going—given the commercial realities—to have to riddle their findings with so many caveats to protect their reputation as to render this electoral exercise completely meaningless.
Meanwhile politicians of every stripe (yes, even Labour, if the BBC is correct, fully support the reopening of Manston) are playing flagrant games with an asset that was up for sale for a considerable period of time with no offer made by any experienced aviation operator or aviation-focussed infrastructure fund.
The market is not always correct, but it smells investment returns as well as it smells blood and it only smelt the latter here. Why? (As if anyone needs a reminder).
Because the airport has been haemorrhaging cash ever since it was turned into a commercial enterprise. (KCC’s announcement that Manston had lost in the region of £100 million was no surprise to any observer; although that they continued to happily piss taxpayer’s money up the wall on it hardly shows them in a positive light either).
And indeed, internal figures showed to employees of the airport detailed that despite an ambitious proposed turnaround effort, the airport would still have been losing millions every year by 2017.
Even with a nearly fourfold increase in anticipated cargo revenues from the £143,900 projected for the year ending March 2015 to £536,200 by March 2017, an increase in Cargolux landing/handling charges and a £130,700 reduction in maintenance costs (deeply unwise) among other efforts, the airport would still have bled £5,000 every 24 hours by 2017.
I do not believe that the numbers represent every avenue explored by the owners, nor do I approve of the manner they set about their closure and asset sale, but they do reflect the impossible struggle of rendering the airport profitable.
(An alternative approach, not detailed in the document, would clearly have been to cut costs rather than raise handling charges, etc., in the hope of stealing cargo business from its rivals. With the nation’s top three airports accounting for 85% of cargo volume and the vast majority of that now coming in the belly of passenger planes, any attempt by a cash-strapped minnow to steal this highly contested market share could easily have been exposed for the charade it would be by undercutting them for a year or two and watching the patient lose even more blood…)
I take no pleasure in being the sole parliamentary candidate not to be seeking to revive Manston. But no single operator has managed in several decades of trying and the fact that not a single aviation operator was interested in buying it when it was on the market tells its own story.
It is time for the government to stop muddying the waters and stirring up false hopes of what would be a desperately naïve intervention, with their attacks on a decision democratically reached by the responsible authority and for Sir Roger Gale—despite his passion (am I charitable?) for the airport—to take a cold hard look at the UK cargo sector and gracefully admit the overwhelming commercial realities of this particular market.
Whilst I retain a healthy scepticism about the new owner’s plans, meanwhile, I also wish them the very best of luck—if those plans, when scrutinised, look like they can create the jobs and investment here on the scale that Manston never offered.
It must be deeply disappointing that investors with a genuine interest in business growth in Thanet should be being fought tooth-and-nail by a local MP and central government politicians apparently desperate to bolster his campaign and electroshock a clearly dead asset back into life.