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Manston Airport – A win-win scenario for the developer but not for East Kent?

by BGL Communications on October 30, 2020 Comments Off on Manston Airport – A win-win scenario for the developer but not for East Kent?

A personal view by Peter Forbes,
Director, Alan Stratford and Associates Ltd

The long-running saga of the proposed freight hub at Manston Airport continues despite the Government’s decision to grant the Development Consent Order (DCO) against the recommendations of the Planning Inspectorate. Riveroak Strategic Partners (RSP) is planning to invest some £300m in the development which it claims will create over 23,000 jobs in East Kent and the wider economy by its 20th year of operation.

Will it ever be commercially viable ?

But despite the go-ahead, there are fundamental question marks about Manston’s commercial viability, which was not assessed or taken into account either in the Government’s decision nor in the Planning Inspectorate’s analysis. The key disadvantage of Manston is its remote location in the far south east of the UK, which increases the time and cost of onward trucking within the country. This is particularly important for perishable items and it is not surprising that many of the larger supermarket chains have their main distribution centres in the ‘Golden Triangle’ within the East Midlands.

The scale of the project is ambitious, but this was necessary in order to warrant consideration for a DCO. As an aviation economist, I can safely say that Manston, irrespective of the level of investment funding, will never attain the cargo throughput to make the hub financially viable, which RSP say is between 150,000 – 200,000 tonnes per annum.

This would represent nearly a quarter of all dedicated freighter traffic in the UK in 2019. Growth in this market in the UK has been virtually static over the past decade (an increase of just 0.8% pa between 2010 and 2019) and, whilst there has been some improvement in dedicated freighter traffic during the Covid-19 pandemic, this growth is likely to be short-term once the passenger market recovers. The reality is that air freight is often carried more cost-effectively as bellyhold cargo on passenger aircraft rather than in dedicated freighters. Furthermore, the future demand for air freight will be constrained by increasing costs as the aviation sector endeavours to meet its climate change commitments.

Over 84% of the UK’s dedicated freighter traffic is focused on three hubs at Heathrow, East Midlands and Stansted airports, where the main freight consolidators, Fedex, UPS and DHL, have their main bases. There is no reason to suppose that they would abandon these in favour of Manston. Whilst it is recognised that there can be slot constraints at these airports at certain times , there are other centrally-located airports such as Birmingham and Doncaster Sheffield which would be preferable to Manston. Furthermore, and of crucial importance, these airports have no night flight constraints, whereas RSP has committed to no night flights at the proposed Manston hub. Night flights represent nearly one half of all dedicated cargo flights and are particularly important for perishables and other fast-moving consumer goods (FMCGs).

It is difficult to see how Manston will now suddenly be able to attract cargo airlines to the airport when its previous owner, Infratil, were unable to do so. Whilst some investment will be necessary to make the airport operational, this would not dramatically change this position. Other airports handling freight traffic already have up-to-date facilities with available capacity in place. Any investment in Manston would be unlikely to give it any competitive advantage.

Similar considerations apply for possible passenger flights at Manston, although these would be on a smaller scale than dedicated freighter traffic. There was an attempt to introduce passenger flights in the 1990s, when the then-owner, Planestation, established its own home-based airline, EUJet, at the airport, although this was short-lived. A new rail station at Thanet Parkway has recently been given the go-ahead by Kent County Council but although this is relatively close, passengers would still need to be bussed to the airport. The reality is that nearly all smaller regional airports in the UK were losing money even before the Covid-19 pandemic, so it is difficult to see how Manston might be any different.

Local concerns

The decision to proceed with the development has split those living in East Kent, which has one of the highest unemployment rates in the UK. On the one hand, some residents support the proposals due to the significant level of jobs that the developer, Riveroak Strategic Partners (RSP) claim would be created.

RSP seem now to be backtracking on this by saying that they would not be as high as they originally stated and were assessed by the Government and the Planning Inspectorate due to automation. It is difficult to understand why this was not considered in the first instance. Many local residents are concerned about aircraft noise, particularly if night flights were ever to be introduced and about the impact of the development on climate change. RSP has recently indicated that it is in discussions with the Port of London Authority (PLA) about the use of electric barges, whereby freight arriving at Manston is trucked to the Port of Ramsgate, transferred onto electric barges to sail round the Thames and into London. Whilst technically this might perhaps reduce carbon emissions, it clearly would significantly increase transit times and costs in comparison to a direct road journey. Whilst it should be expected that all air freight and any subsequent trucking will need to comply with the UK’s Net Zero carbon commitments in the future, the electric barge scheme is unlikely to be commercially viable.

A local resident has launched an appeal against the Government’s decision in the High Court following a Crowdfunding campaign, although this can only be overturned on the basis that the Secretary of State failed to adopt the correct procedures rather than on the merits or dismerits of the freight hub itself. A judicial review has now been granted, although a date for this has not yet been set.

What are the motives of RSP and Stone Hill Park ?

If a major freight hub at Manston is not commercially viable, as is predicted by all industry experts, then we need to look at the motives of RSP and of Stone Hill Park, who originally sold the site to RSP, reportedly for £16.5m. It is important to appreciate that the only commercial value at Manston is in the sale of the land, ideally for residential housing but, on a secondary level, for industrial development. This, however, must largely be seen as a longer-term strategy as the site is not designated for housing in Thanet District Council’s Local Plan, which may have prompted Stone Hill Park to sell the site to RSP. We do not know the precise details of this sale, but it seems hard to believe that in the event of any future land sales, Stone Hill Park would get no financial payback.

If the Appeal is unsuccessful, in the short-to-medium term RSP may attempt to set up some cargo operations at Manston, but these would be very limited, particularly without any night flights which were a vital component of its modest levels of traffic prior to its closure. It may try to seek investment, including Government grants, for industrial development on part of the site on the basis that this would qualify as ‘enabling development’, although this would not significantly increase traffic levels at the airport. So for RSP and its financial backers, it is a waiting game until it is clearly demonstrated that the airport will never be commercially viable and that residential housing and/or industrial development is the only alternative. If the Appeal is successful, then the airport development would not proceed and again it is a waiting game until the site can be redeveloped. Either way, it would appear that, as the owners of the site and the beneficiaries of any future land sales, RSP may be in a ‘win-win’ situation.

So where does this leave local residents in Ramsgate and in East Kent ? Whilst it is possible that, if the Appeal is unsuccessful, a small number of jobs could be created in the short-term, it is unlikely that the airport would ever require more than the 150 staff it employed when it closed in 2014. There is likely to be a continuing fear of the possibility of reintroducing night flights and climate change concerns will not vanish away.

Whatever the outcome, the Government, Thanet District Council and Kent County Council will need to look very carefully at the way forward in the best interests of local residents and the wider UK economy.

BGL CommunicationsManston Airport – A win-win scenario for the developer but not for East Kent?

Manston Airport DCO – Promises of over 23,000 new jobs are flawed

by BGL Communications on July 27, 2020 Comments Off on Manston Airport DCO – Promises of over 23,000 new jobs are flawed

A personal view – Peter Forbes, Director, Alan Stratford and Associates


The approval of the Development Consent Order (DCO) for a major cargo hub at the disused Manston Airport is a highly controversial and political decision by the UK Department for Transport. But is this in the best interests of the UK aviation sector and the local community in East Kent? In this article, I offer my personal view as to why I feel that this decision, which over-ruled an earlier recommendation by the Planning Inspectorate, is flawed and will only potentially benefit the developer rather than provide the promised 23,000 new jobs both to the local area and across the UK as a whole.

I should firstly advise that I have been personally involved with Manston airport over a number of years – initially providing consultancy advice through my company, Alan Stratford and Associates, to the then-owner, the Wiggins Group and subsequently to Thanet District Council (TDC). More recently I carried out a feasibility study for a private investor interested in acquiring the site and re-opening the airport. The main conclusion of this study was that, whilst a small-scale freight / passenger airport might just be commercially viable, the real value was in the sale of all (or part) of the land for housing development.

However, since this study, the economic landscape has changed through the impacts of Brexit, Covid-19 and several smaller UK regional airports have either closed or are struggling financially. In the case of Manston, there was also a key issue as to whether permission for night flights would be granted from TDC, which would strongly impact on the relatively modest levels of dedicated freighter traffic that might be achievable. In the end, the potential investor did not proceed further. I am not currently working for any group involved with the airport.

Manston’s history

In assessing this project, it is useful to review the airport’s history. The airport was originally an RAF station with dual RAF and civilian use but was sold by the Ministry of Defence in 1999 to the Wiggins Group, a publicly-quoted property investment company. The Wiggins Group, who rebranded themselves as Planestation developed Manston primarily for low-cost UK operations. During 2004 and 2005, the Irish airline, EUjet based up to seven B737 aircraft at the airport for UK domestic and European short-haul operations. Planestation subsequently purchased a stake in the airline. The venture, however was short-lived and Planestation went into liquidation in July 2005. Later that year the airline was purchased by Infratil, a New Zealand-based company, who also owned and operated Prestwick Airport. Infratil marketed the airport primarily for freight. There was some hope that it might be recognised as an overspill London airport for passenger traffic although this never materialised due to its location and poor surface access. From 2010 onwards, traffic levels declined and the airport became financially unviable, reportedly losing over £3.0m a year just prior to its closure in 2013.

Later in 2013, the site was sold to Ann Gloag, a Scottish entrepreneur, reportedly for £1.00. She subsequently sold it on Stone Hill Park, a property company, who intended to develop the site with plans for some 4,000 homes and a business park, whilst retaining a ‘heritage’ airport for vintage aircraft and other light aviation. Although proposals for some housing at the site were included in Thanet District Council’s Draft Local Plan, these were subsequently rejected by Councillors in favour of retaining Manston for freight and passenger use. In July 2019, Stonehill Park sold the airport to RiverOak Strategic Partners (RSP) reportedly for some £16.5m. RSP plan to develop Manston as a major freight airport with some limited passenger traffic. Planning consent for this has been now given through a Development Consent Order (DCO) approved on behalf of the Secretary of State for Transport, although this was against the recommendations of the Planning Inspectorate examining panel. A local community group has vowed to raise funds to challenge this decision through a Judicial Review.

In order to fulfil the requirements of the DCO, RSP needed to show that the airport was a significant national infrastructure development with a minimum of 10,000 ATMs per annum. Under RSP’s forecasts, Manston would handle some 181,436 tonnes of cargo with 10,144 cargo ATMs by Year 6 of its operation. Passenger traffic was forecasted at 965,925 by Year 6 and 1,307,259 by Year 18. The development is forecasted to create some 23,235 direct, indirect and induced jobs – of which 3,417 were direct jobs at the airport itself. This compares against the total of just 150 jobs at Manston when the airport closed.

Location is too remote

In terms of freight, the key disadvantage of Manston is its location at the extreme SE corner of the UK and its poor surface access. Historic traffic levels at the airport have generally been modest and it has never been to compete with East Midlands and Stansted – the UK’s two largest airports for dedicated freighter traffic, which account for some 71.7% of all cargo handled by dedicated freighter aircraft. The increased onward distribution times at Manston are particularly relevant for perishable goods which comprise a significant proportion of all dedicated freighter cargo. In addition, the inability to offer night flights at the airport, which is a condition of the DCO, will be a significant constraint for the development of a freight hub, particularly for main international freight package couriers such as Fedex, UPS and DHL. Similar considerations apply for passenger traffic as the catchment area population is relatively small. This is unlikely to increase significantly beyond perhaps a handful of UK domestic and European routes even with a new rail station at Thanet Parkway, located some 3/4 miles from the airport. The conclusion that the proposed development of Manston would not be commercially viable is also made in reports by two other aviation consultants, York Aviation and AviaSolutions.

It might be argued that the UK air freight market will grow substantially over the coming decades. Prior to Covid-19, Boeing forecasted that the global air freight market would grow by some 4.2% pa over the next 20 years. However much of the growth will be in passenger bellyhold rather than dedicated freighter cargo (bellyhold currently accounts for 70% of all UK air cargo) and, in practice, the dedicated freighter market in the UK is highly fragmented and has shown relatively little growth in the past decade.

Apart from the international freight couriers, the all-cargo airlines operating in the UK, such as Cargolux and AirBridgeCargo, are already well-established at other airports and will be reluctant to move to Manston. This also applies to the freight subsidiaries of the passenger airlines, several of which operate dedicated freighter aircraft. The UK’s only all-cargo airline, CargoLogicAir, which leases two B747F aircraft, temporarily suspended operations in February this year due to a lack of demand, although these have recently recommenced following the Covid-19 pandemic. This may however, be short-term as any growth of the UK air freight market is likely to be impacted by the aftermath of the pandemic, Brexit and a potential economic recession.

No clear need for the Development

Given the fact that Manston was historically unable to develop significant levels of freight and/passenger traffic on a profitable basis and the constraints on future growth outlined above, I really cannot see why the Secretary of State for Transport overruled the Planning Inspectorate and approved the DCO. There is significant available capacity to handle additional freight at East Midlands and Stansted (as well as at other airports with the exception of Heathrow and Gatwick) for at least the next 15-20 years. If further capacity for dedicated freighters is needed in the longer-term, then it would be preferable to have a more central location within the UK, either through expansion of an existing airport or possibly by developing an ex-RAF airfield with good road connections and where there would potentially be fewer households exposed to aircraft noise. It simply does not make sense that the SoS can conclude that ‘there is a clear case of need for the Development which existing airports (Heathrow, Stansted, EMA and others able to handle freight) would not bring about to the same extent or at all’. My feeling is that the rationale for this conclusion is likely to be challenged in any Judicial Review of the SoS’s decision.

The issue of cost was not raised as part of the DCO approval process. The capital cost of the proposed development has been variously reported at £300m, £330m and £400m. This investment, together with the financing and operating costs would need to be recovered through airport and handling charges. It is likely that these charges will be higher than those at other airports where the infrastructure is already in place, even if there are initial discounts to attract air freighter operators.

It should also be noted that the previous owner of the site, Stone Hill Park, proposed that a ‘heritage’ airport is retained at the site in addition to new housing and a business park. This could comprise the existing heritage museum, which would need to be relocated and facilities for vintage aircraft and general aviation. It is also possible in the longer-term that the airport might support commercial operations by smaller electric aircraft.

Sale of land

There is little doubt in my mind that RSP’s objective in promoting the Manston development is to sell off some or all of the land for housing and/or industrial development. There is a part of the airport site, known as the ‘Northern Grass’, which has long been muted as a potential area that could be sold off – although RSP claim that it would be used for the airport’s development. It is interesting that the Planning Inspectorate took a different view on whether this was needed. It should be noted that approval of the DCO does not prevent RSP selling off some or ultimately all of the land should, for any reason, the airport prove to be unprofitable or the development does not proceed at all. I also wonder as to what are the Terms of Payment for the sale of the site by Stonehill Park Developments to RSP. These have not been made public and, if I were in RSP’s shoes, I would not part with £16.5m unless I was certain that the airport scheme had full and final approval and funding was in place for the development. If, for some reason, payment was not forthcoming, I would assume that ownership of the site would revert back to Stonehill Park. Alternatively, if the development were to go ahead and some land was ultimately sold, they may have negotiated a potential stake in the proceeds.

Although Thanet District Council and the local MPs are in favour of the development, there is considerable opposition locally, particularly as the flight paths to the east are over the town of Ramsgate. There is also likely to be an adverse impact to tourism in Ramsgate although the Planning Inspectorate acknowledged that there may be some tourism benefits to the wider East Kent region. There is also some local support for the promised new jobs in an area of high unemployment but this, of course, is entirely dependent on the success of the airport development.

Suitability of the developer

A further issue is the background of RSP and its key personnel. RSP is a US investment company with no background in or experience in airport development or operations. The source of the funding for the project (£330m) is completely undetermined. Many of the project’s opponents have questioned RSP’s financial resources and it is noteworthy that there were delays in paying the Planning Inspectorate’s fees for the DCO application. RSP’s key UK director, Tony Freudmann, has had a chequered career. He was reportedly struck off as a Solicitor for the misuse of client funds, before joining Planestation, where he became CEO of its European operations. He has also been involved with other airport developments in Germany, although none of these have proved to be successful. Mr Freudmann is known to be a close associate of two local Tory MPs, Sir Roger Gale and Craig Mackinlay.

Impact on climate change

I recognise that, for some objectors, there is an issue as to whether the project would contribute towards climate change. RSP has indicated that the airport would contribute some 1.9% of the UK’s target CO2 emissions for 2050. The Planning Inspectorate determined that this weighed moderately against the development. My own view, however, is that the UK aviation sector as a whole is fully committed to meeting these targets in line with ICAO requirements and, if the development were not to proceed, any traffic growth would in any case be accommodated at other UK airports.

How would the development be financed?

Should the DCO decision be upheld, then it is unclear as to how the development would be funded. If private finance is not forthcoming, then might RSP seek funds through a public offering ? It is also possible that the RSP may try to sell some land to enable the initial investment, although ultimately the only beneficiary of this will be developer. In addition, given the fragmentation of the UK air freight market, it is conceivable that RSP might at some point attempt to fund its own home-based cargo airline – somewhat reminiscent of Planestation’s venture with EUjet and the Stobart Group’s investment in Stobart Air to support London Southend Airport. But CargoLogic’s difficulties in establishing a viable dedicated cargo airline even when better located UK airports are used would suggest that any venture of this type would be doomed to failure.

False hopes?

As a specialist consultant, I am certainly not anti-aviation and I generally support expansion, subject to meeting the relevant climate change and other environmental constraints. I would hope that some aviation activity can be retained at the site both to maintain its heritage and for light aviation. This might, in the future, include the use of electric aircraft eg for recreational flying and small-scale commercial passenger operations. There is a strong sense of community in the Ramsgate area and passions both for and against the development run high. But the location of any airport is fundamental and the development of a major cargo hub at Manston as proposed is simply not commercially viable. I cannot see any reason for the SoS’s decision to approve the DCO application, beyond perhaps creating a false promise of jobs in a deprived area as we move into the expected economic recession.

I personally hope that the decision will now be overturned in a Judicial Review. If not, I suspect it will be a long drawn out saga with few, if any, jobs created and no long-lasting benefit to the local community.

BGL CommunicationsManston Airport DCO – Promises of over 23,000 new jobs are flawed