Financial Trouble?

[richardtaylor]

Reading PPRUNE, suggestions the airport is losing quite a bit of money, at least so says Peel - £1m a month, it is claimed!

[Humberside]

Apparently so. Clearly unsustainable long term. However the local press in Doncaster seem to be exagerating it and calling it a cash crisis, which it isn't since Peel have big pockets.

But action is needed now to turn things around. Losses should be expected since no doubt there are debts outstanding from the set up costs. DSA is a long term investment. Add in the general economic problems and you can't expect DSA to have good financials. But £1 million pound per month loss is huge - £12 million a year. You can't just do nothing

DSA have tried to get council tax relief - this has been refused. I agree with this since I think support should be provided that isn't DSA only - improving the tourism product has been mentioned - that would benefit the whole area and not just DSA for example. If the local authorities etc can provide such support, and DSA can do it's own cost cutting then hopefully the losses can be reduced to more sustainable levels

[pug]

Bosses at Robin Hood airport have announced that under a new proposal to streamline airport operations, around nine top-level jobs may become untenable. Peel Airports, the owner of the struggling airport, wants to improve staff development opportunities whilst maintaining a steadfast approach to escalating financial woes.
The past year has not been kind to Robin Hood airport. The collapse of world markets has exacerbated an already-critical financial situation and, despite the release of a number of documents detailing prospective rescue plans, the airport continues to struggle on the brink of insolvency, unable to secure any kind of financial support from Doncaster council.
A recent survey revealed that Robin Hood airport is very popular with customers travelling for leisure reasons. The company is expected to remain in the red until 2010 but the new ski season should provide the airport with a substantial capital boost.
The recent threat of redundancy may hint at an increasingly severe financial situation. It is interesting to note that only two days after Peel Airports promised to create 17,000 new jobs over the next twenty years, the company threatened to axe a significant proportion of their operational staff.
Mike Morton, a spokesperson for Robin Hood, blamed the recent ‘credit crunch’ for the airport’s woes: “These are some of the most difficult trading conditions the aviation industry has experienced in decades.”
Robin Hood airport has been the subject of several damning newspaper reports and it seems increasingly likely that the owners are using the credit crunch as a scapegoat to avoid admitting the extent of the airport’s debts to the media.

Found on an expert airports blog...

[pug]

Yangyang International is an airport looking for a reason to exist. Built on South Korea's east coast just seven years ago, you won't find any delays or long queues here. In fact, you won't find any passengers at all.

The initial vision could not have been more different.

Up to three million people a year were meant to throng the gleaming floors of the departure and arrival halls, built at a cost of almost $400m (£260m).

But last year an average of just 26 passengers a day came through the doors, vastly outnumbered by the 146 airport staff on hand to serve them.

In November the last commercial flight took off, and the terminal became what the Korean national press has dubbed a "ghost airport", an impressive monument to overestimated demand.

But it is not an isolated example.

Empty spaces

In fact, if there was to be an award for the world's quietest international airports, South Korea would surely be one of the favourites.



Politicians, in order to gain votes, promise their constituents an airport

Choi In-wook
Korean Citizens Action Network
At the other end of the country from Yangyang, way down in the south-west, is the even newer Muan International Airport.

It opened less than two years ago, and although a handful of flights do at least land there, the terminal is struggling.

Built amidst the surrounding onion fields, it looks an unlikely spot for a thriving airport, and the scene inside is, once again, one of empty check-in desks and empty spaces.

Figures for last year show passenger levels at less than 3% of capacity.

"It might be better if it was used a bit more," said one passenger I spoke to, part of a group of Korean tourists preparing to catch one of only two flights leaving that day.

"But having said that," she added, "it is nice to come to an airport that isn't busy for a change."

Vanishing demand

As elsewhere, the project was meant to be a boost for the local economy, bringing in visitors, and connecting the local economy with the wider world.


But the region's farmers and fishermen may now wonder if it was a worthwhile investment.

South Korea has a total of 14 regional airports. Figures show that 11 of them lost money last year.

What should have been the 15th, another new east-coast airport, already more than 80% complete, has been suspended because of lack of demand.

And there is currently an ongoing debate about the wisdom of the plans to build yet one more, somewhere near the southern port city of Busan.

One reason for the lack of demand for air travel may be the simultaneous development of a high-speed rail link that now whisks travellers from one end of the country to the other in less than three hours, as well as the construction of a network of new motorways.

'Political logic'

Local airports have been built by "political rather than market logic", according to one newspaper.

The Korean Citizens' Action Network, an organisation that monitors government spending, claims that hundreds of millions of dollars have been wasted on terminals and runways that simply are not needed.



Yanyang airport was built at a cost of almost $400m
"Politicians, in order to gain votes, promise their constituents an airport," said spokesman Choi In-wook.

"Rather than checking the need thoroughly, the feasibility studies can be distorted to support the projects, and as a result there is an oversupply of airports in this country."

Could not the case be made, though, that some of today's under-used airports may turn out to have a long-term future?

"Maybe," he said. "If they honestly forecast that there would be large, initial losses for a long-term strategic benefit, then fair enough. But from the beginning the feasibility reports are inaccurate, so no one knows the true prospects." Both the government and the Korea Airports Corporation, the body that manages the regional airports, refused the BBC's request for an interview.

There are those, like the staff at Yangyang airport, who do indeed believe that they may still find a profitable future for their terminal.

But it is the views of the passengers that really matter - and for now, they are voting with their feet.

Source; BBC

I know its thousands of miles away, and they are used less than DSA, also being publicly funded. The fundamental flaws are there though....

Sounds like the problem in Yorkshire at the moment.