Manchester Airport looking to take over airport in Chicago

The Bolton News: Manchester Airport looking to take over airport in Chicago Manchester Airport looking to take over airport in Chicago

Manchester Airport is bidding to take over a Chicago airport as it seeks to expand overseas.

A bid to run Midway International Airport is being put together in partnership with Australian investment partner Industry Funds Management.

It is one of 16 groups also trying to buy what is America's 26th busiest airport but it is an indication of the current ambition at Manchester Airports Group (MAG).

Bolton Council has a stake in MAG as do each each of the 10 local authorities which make up Greater Manchester.

The group currently runs Manchester, East Midlands, Bournemouth and Humberside airports and it recently bought Stansted for £1.5bn.

Manchester Airport would be keen to lease, operate and improve Midway for up to 40 years.

There would be no financial involvement. The deal would be to help run operations there.

Midway carried 19.5m passengers last year, only slightly fewer than Manchester.

A City of Chicago spokesman said: “We can confirm that Manchester Airports Group was one of the 16.”

A MAG spokesman said: “MAG is not providing any equity to a deal. The airport group may provide operational consultancy services later on, if requested.”

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12:59pm Tue 26 Feb 13

BWFC71 says...

Cue the weirdo from a fringle political party who would rather sell Bolton Council's shares in MAG for a one-off payment rather than keep the shares and gaining more funds, through dividends, in the longer term!!!

Keep the shares and let the council reap what we sow with them - the dividends will get bigger with more passengers using the airports and with expansionism.
Cue the weirdo from a fringle political party who would rather sell Bolton Council's shares in MAG for a one-off payment rather than keep the shares and gaining more funds, through dividends, in the longer term!!! Keep the shares and let the council reap what we sow with them - the dividends will get bigger with more passengers using the airports and with expansionism. BWFC71

1:05pm Tue 26 Feb 13

BWFC71 says...

I wish the BN would get its facts right.....

The MAG sold Humberside Airport to another group (Eastern Airways) in August 2012.
I wish the BN would get its facts right..... The MAG sold Humberside Airport to another group (Eastern Airways) in August 2012. BWFC71

9:21pm Tue 26 Feb 13

SmoggyDiasboro says...

Yep. I'm that wierdo. The strange sort of person that thinks that when times are hard, it may be better to take the cash and spend it on capital projects NOW rather than to get potential dividends later. Perhaps when we hear that there is a massive shortfall on capital to spend on school building etc., we may wonder whether spending an additional £1m on maintenance on 'old' schools and get £1m in 'airport' dividends is good business. This really is the worst form of corporatism. There is no justification for Bolton taxpayers to invest in East Midlands Airport, Bournemouth Airport, Stansted Airport. Sell the 3% we own and invest in Bolton not in Essex. Maybe a 'wierdo' opinion but I'm happy with it.
Yep. I'm that wierdo. The strange sort of person that thinks that when times are hard, it may be better to take the cash and spend it on capital projects NOW rather than to get potential dividends later. Perhaps when we hear that there is a massive shortfall on capital to spend on school building etc., we may wonder whether spending an additional £1m on maintenance on 'old' schools and get £1m in 'airport' dividends is good business. This really is the worst form of corporatism. There is no justification for Bolton taxpayers to invest in East Midlands Airport, Bournemouth Airport, Stansted Airport. Sell the 3% we own and invest in Bolton not in Essex. Maybe a 'wierdo' opinion but I'm happy with it. SmoggyDiasboro

10:38pm Tue 26 Feb 13

BWFC71 says...

So you would rather have a short term gaina nd long term decline?

Very folly that attitude.

Those shares bring in a steady stream of income - yes sell the shares and have a nice short-term income to boost whatever is required, but what happens when that money runs out?

How much money is being spent on keeping those shares? In fact having those shares is a win-win scenario - its a steady annual income which helps with the budget, and having the shares is costing NOTHING to the town - a nice added bonus!!!

How about using the £80+ million is reserve money in helping with maintenance, etc around teh borough.

I reiterate holding those shares cost the town/council NOTHING, but we gain the added value of steady income.

I am believer in holding shares and reaping the rewards of having those shares with a anice steady income - its definitely not about corporatism, its about long-term savings and investments which provide a reward.

OFFICIAL QUESTION: If teh shares were sold and the money used and then runs out without completeing all the jobs it was meant to, what would you sell off next? How would you gain the steady income, that is legally viable?
So you would rather have a short term gaina nd long term decline? Very folly that attitude. Those shares bring in a steady stream of income - yes sell the shares and have a nice short-term income to boost whatever is required, but what happens when that money runs out? How much money is being spent on keeping those shares? In fact having those shares is a win-win scenario - its a steady annual income which helps with the budget, and having the shares is costing NOTHING to the town - a nice added bonus!!! How about using the £80+ million is reserve money in helping with maintenance, etc around teh borough. I reiterate holding those shares cost the town/council NOTHING, but we gain the added value of steady income. I am believer in holding shares and reaping the rewards of having those shares with a anice steady income - its definitely not about corporatism, its about long-term savings and investments which provide a reward. OFFICIAL QUESTION: If teh shares were sold and the money used and then runs out without completeing all the jobs it was meant to, what would you sell off next? How would you gain the steady income, that is legally viable? BWFC71

8:12am Wed 27 Feb 13

SmoggyDiasboro says...

We fundamentally disagree over this. My view, rational to my mind but 'wierdo' to yours' is that the capital proceeds are far better than the revenue stream at present. I cannot see why Bolton residents should be 'investing' in Bournemouth, East Midlands and Stansted. I can see some logic in Ringway, but not the others.

The cost of the shares is maybe best expressed as the opportunity cost. For example I do not know what the borrowing cost of Bolton Council is? Also, I can only guess what the yield percentage on the market value of the shares is. IF, and it's a big if, the shareholding is worth £50m, then an annual dividend of £1m represents a 2% yield. If so, could a better return be gained elsewhere.

Re use of reserves, fully agree. Any FREE reserves, should be released for capital expenditure, especially where such capital reduces revenuie.

To your 'OFFICIAL' question - how can I respond? I have no 'official' standing other than as a reader of various items.To me, it is simple - budget it for various jobs - deliver those jobs at that price (a difficult concept I know for some). The only real problem is that it could be wasted on such white elephants as the Waterplace 2, or a new bus station - but we elect those responsible
We fundamentally disagree over this. My view, rational to my mind but 'wierdo' to yours' is that the capital proceeds are far better than the revenue stream at present. I cannot see why Bolton residents should be 'investing' in Bournemouth, East Midlands and Stansted. I can see some logic in Ringway, but not the others. The cost of the shares is maybe best expressed as the opportunity cost. For example I do not know what the borrowing cost of Bolton Council is? Also, I can only guess what the yield percentage on the market value of the shares is. IF, and it's a big if, the shareholding is worth £50m, then an annual dividend of £1m represents a 2% yield. If so, could a better return be gained elsewhere. Re use of reserves, fully agree. Any FREE reserves, should be released for capital expenditure, especially where such capital reduces revenuie. To your 'OFFICIAL' question - how can I respond? I have no 'official' standing other than as a reader of various items.To me, it is simple - budget it for various jobs - deliver those jobs at that price (a difficult concept I know for some). The only real problem is that it could be wasted on such white elephants as the Waterplace 2, or a new bus station - but we elect those responsible SmoggyDiasboro

12:02pm Wed 27 Feb 13

BWFC71 says...

Firstly a Water Place 2 would generate an income stream for teh council - therefore how could that be classed as a white elephant?

Secondly teh shares are in the Manchester Airport Group - emphasis is on Manchester Airport - a regional airport. Just because the group has expanded to include Bournemouth, Stansted, and East Midlands only means that money from those airports is helping OUR region, so why is that such a bad thing, or would you rather have conglomerate London based companies take money away from our region only? The MAG is based and headquartered in the Manchester region and generates job for people based in teh Manchester region. Even the recently announced "Schiphol" style city at the airport, another MAG expansion plan, will generate income for the Manchester region and create even more jobs.

The steady icnome, which comes from the shares held by Bolton Council are not budgeted far and as such the dividend recieved is an added bonus each year and as such creates a relief for the council.

The selling fo the shares, yes creates an immediate windfall for teh council but once all that money has been pigeonhold where will Bolton Council gain there extra bonus revenue each year.

Again, it is such a simple question, if the shares are sold and the money has been used up, where would you find the extra income?
(I can do a Jeremy Paxman, if required, to gain a straightforward answer)
Firstly a Water Place 2 would generate an income stream for teh council - therefore how could that be classed as a white elephant? Secondly teh shares are in the Manchester Airport Group - emphasis is on Manchester Airport - a regional airport. Just because the group has expanded to include Bournemouth, Stansted, and East Midlands only means that money from those airports is helping OUR region, so why is that such a bad thing, or would you rather have conglomerate London based companies take money away from our region only? The MAG is based and headquartered in the Manchester region and generates job for people based in teh Manchester region. Even the recently announced "Schiphol" style city at the airport, another MAG expansion plan, will generate income for the Manchester region and create even more jobs. The steady icnome, which comes from the shares held by Bolton Council are not budgeted far and as such the dividend recieved is an added bonus each year and as such creates a relief for the council. The selling fo the shares, yes creates an immediate windfall for teh council but once all that money has been pigeonhold where will Bolton Council gain there extra bonus revenue each year. Again, it is such a simple question, if the shares are sold and the money has been used up, where would you find the extra income? (I can do a Jeremy Paxman, if required, to gain a straightforward answer) BWFC71

12:05pm Wed 27 Feb 13

BWFC71 says...

I almost forgot, the £40+million for the new Bolton interchange is NOT coming from Bolton Council but the funds have been provided by Transport for Greater Manchester.
I almost forgot, the £40+million for the new Bolton interchange is NOT coming from Bolton Council but the funds have been provided by Transport for Greater Manchester. BWFC71

7:08pm Wed 27 Feb 13

SmoggyDiasboro says...

Oh dear, you really are an aggressive troll at least Jeremy Paxman has an element of purpose behind his questioning.

As I said we have different opinions about this, but I don't feel I need to descend into such naked aggression.

1. WaterPlace2 - OK let's see the accounts after a year of operation and how much NET revenue that brings in.
2.The shares have a value - I can as an amateur put a value on it. However just because someone pays a dividend doesn't mean it's a good investment. Of all the marvellous councillors / council executives, who knows how to run an airport. Come on - it's a fortuitous windfall 'given' to Bolton by Manchester City Council in the 1970's. We can all pretend but if it gives some income, is that better than the interest the Council pays to the Public Works Loan Board? Ask the citizens of Bolton - do they think that Cllrs Morris, Greenhalgh and Heyes are better are spending their money than they are. I'm not picking on anyone - public ownership of commercial operations is not NORMALLY successful.
3. Yes. But why isn't it budgeted? If the Council were, say, to invest in Index Linked Government Bonds rather than the Airport, then the return could be known. Maybe we wouldn't have to pay increased council tax? maybe we could spend more on schools? or (heaven forbid) on a weekly grey bion collection? or on keeping libraries open? if we wanted to use thye revenue.
4. They won't - but as with investment in any form of property, it's like a mansion tax. You may have a house valed at £2m - why should you not pay a progressive council tax on it? you may have no income, so why don't you sell it.
5. I don't need to in many ways. My argument, at its core is that Councils shouldn't own assets such as Airports. Following it through, who are councils? did we elect them to buy / run airports? No - they are honest well meaning individuals there to check that officers 'run services' for their benefit. That's my argument - & as I say we're diametrically opposed
6. (post 2) - I know - but who are GMPTE? A body controlled by nominees of local councils. Again, well meaning but not necessarily the best users of our money. A new £40m central bus station may well fit in with some masterplan (as long as someone pays an £m sum for the vacated land), but it does seem somewhat excessive.

I've tried to be reasonable in a response. I don't expect any riposte to follow such parameters
Oh dear, you really are an aggressive troll at least Jeremy Paxman has an element of purpose behind his questioning. As I said we have different opinions about this, but I don't feel I need to descend into such naked aggression. 1. WaterPlace2 - OK let's see the accounts after a year of operation and how much NET revenue that brings in. 2.The shares have a value - I can as an amateur put a value on it. However just because someone pays a dividend doesn't mean it's a good investment. Of all the marvellous councillors / council executives, who knows how to run an airport. Come on - it's a fortuitous windfall 'given' to Bolton by Manchester City Council in the 1970's. We can all pretend but if it gives some income, is that better than the interest the Council pays to the Public Works Loan Board? Ask the citizens of Bolton - do they think that Cllrs Morris, Greenhalgh and Heyes are better are spending their money than they are. I'm not picking on anyone - public ownership of commercial operations is not NORMALLY successful. 3. Yes. But why isn't it budgeted? If the Council were, say, to invest in Index Linked Government Bonds rather than the Airport, then the return could be known. Maybe we wouldn't have to pay increased council tax? maybe we could spend more on schools? or (heaven forbid) on a weekly grey bion collection? or on keeping libraries open? if we wanted to use thye revenue. 4. They won't - but as with investment in any form of property, it's like a mansion tax. You may have a house valed at £2m - why should you not pay a progressive council tax on it? you may have no income, so why don't you sell it. 5. I don't need to in many ways. My argument, at its core is that Councils shouldn't own assets such as Airports. Following it through, who are councils? did we elect them to buy / run airports? No - they are honest well meaning individuals there to check that officers 'run services' for their benefit. That's my argument - & as I say we're diametrically opposed 6. (post 2) - I know - but who are GMPTE? A body controlled by nominees of local councils. Again, well meaning but not necessarily the best users of our money. A new £40m central bus station may well fit in with some masterplan (as long as someone pays an £m sum for the vacated land), but it does seem somewhat excessive. I've tried to be reasonable in a response. I don't expect any riposte to follow such parameters SmoggyDiasboro

7:38pm Wed 27 Feb 13

BWFC71 says...

point 6 - GMPTE does not exist - as a politician or someone going for election you should know that as a matter of fact! The TfGM (Transport for Greater Manchester) is a local government quango in which all 10 councils created to help work with each other and help each other with regards to the public transport network and create initiatives which will be beneficial to the Greater Manchester region. But they do more than the public transport they control all the traffic lights in Greater Manchester most of the steet furniture and help plan the future of teh road networks as to what could be needed - the only roads, in Greater Manchester, they are not allowed to touch are the Motorways. Also with regards to Public Transport they can only do so much due to legislation that prevebnts the TfGM or any local council from doing - for instance a local council (or TfGM) are not allowed to directly own bus companies or train operating companies!!!

point 3 it isn't budgeted as the amount of the dividend changes from year to year. in 2010 the dividend was worth almost £5 million to Bolton Council whilst in 2011 it was worth almost £6.5 million - but we all know that there could be some years when a dividend is not actually given due to carious reasons!

Point 2 - the Airport is NOT operated by the councillors of the various Boroughs in teh country - that statement is very much a simplistic view. The MAG shares are 51% owned by the 10 Boroughs whilst the other 49% are owned by an Austrlian Investment Company and the group itself operates as an arms-length company, thus it has autonomy from the various Boroughs and shareholders.

If you believe that a Council should not have any assets for which it can garner annual incomes then how is the council going to make the money for continuous improvements in schools, roads, social housing, parks, and various other social services - unless you want the money to come from both the Council Tax and Central Government, which in turn would increase various taxes such as VAT!!!

Agin I have to ask, to which you have not yet answered....

if the shares are sold and the money has been used up, where would you find the extra, "bonus" income?
point 6 - GMPTE does not exist - as a politician or someone going for election you should know that as a matter of fact! The TfGM (Transport for Greater Manchester) is a local government quango in which all 10 councils created to help work with each other and help each other with regards to the public transport network and create initiatives which will be beneficial to the Greater Manchester region. But they do more than the public transport they control all the traffic lights in Greater Manchester most of the steet furniture and help plan the future of teh road networks as to what could be needed - the only roads, in Greater Manchester, they are not allowed to touch are the Motorways. Also with regards to Public Transport they can only do so much due to legislation that prevebnts the TfGM or any local council from doing - for instance a local council (or TfGM) are not allowed to directly own bus companies or train operating companies!!! point 3 it isn't budgeted as the amount of the dividend changes from year to year. in 2010 the dividend was worth almost £5 million to Bolton Council whilst in 2011 it was worth almost £6.5 million - but we all know that there could be some years when a dividend is not actually given due to carious reasons! Point 2 - the Airport is NOT operated by the councillors of the various Boroughs in teh country - that statement is very much a simplistic view. The MAG shares are 51% owned by the 10 Boroughs whilst the other 49% are owned by an Austrlian Investment Company and the group itself operates as an arms-length company, thus it has autonomy from the various Boroughs and shareholders. If you believe that a Council should not have any assets for which it can garner annual incomes then how is the council going to make the money for continuous improvements in schools, roads, social housing, parks, and various other social services - unless you want the money to come from both the Council Tax and Central Government, which in turn would increase various taxes such as VAT!!! Agin I have to ask, to which you have not yet answered.... if the shares are sold and the money has been used up, where would you find the extra, "bonus" income? BWFC71

9:30pm Wed 27 Feb 13

SmoggyDiasboro says...

Point 6 - I am NOT a politician, nor am I planning on standing for election. I apologise to every single person who has read the above for misnaming TfGM as GMPTE. I hereby stand corrected and will if necessary spend a suitable period in the stocks AS LONG AS you acknowledge re point 3 that according to the accounts of Manchester Airport Group for the past 4 published years that Bolton (then a 5% shareholder) received its share of dividends as follows:
2008-09 Total Dividend Paid (page 59 of accounts) £26m. Bolton share £1.3m
2009-10 Total (page 49) - £20m. Bolton share - £1m
2010-11 Total (page 55) - £20m. Bolton share - £1m
2011012 Total (apologies didn't note page but it's there) - £20m. Bolton share £1m

So, with all respect, your statement in point 3 is overstated by a factor of 300-400%.

Re your points about ownership of bus companies / TOCs - noted. But what relevance has that. My only comment about, what I inadvertently called GMPTE but which I now accept I should have called, TfGM, was that they appear to have an almost unlimited desire to spend Council Tax payers / fairpayers money on what I consider to be a white elephant such as a new Bus Station.

Re point 2. No it may not be. Unfortunately (up until last year when equity was diluted by a sellout of a certain percentage - I thought it was 40%, but I'm quite happy with your 49% - to an Australian investor) the Councils owned 100% of MAG and had at least 2 Non-executive directors: Cllr Brian Harrison of Manchester and Lord Peter Smith (Wigan) / David Goodwin (Stockport) amongst them. Maybe you will agree with me about Non-executive Directors (like a bidet, they add a touch of class but noone knows what they are really for), but on behalf of the owners of the Airport (i.e. us, the Council Tax payers of Greater Manchester's constituent local authorities) they were part of management. Not controlling, I'll grant.


Re your final point - no argument - once the Councillors have (in polite terms) spent it on grandiose self-glorification schemes, it's gone. But as I have pointed out before, it is tied up capital. Bolton pays a large amount on borrowed money in interest. It claims continuously it cannot spend on schools, on roads etc., but it has this massive 'investment' stashed away generating only a minor amount of return (in my view of the accounts).

As I have said, we won't agree on this point - I have a fundamental belief in getting our money back from Councillors OF ALL PARTIES. Short trem investment maybe of cash balances to meet known expenditure. Speculative stock market investment by amateurs against the big Infrastructure hedge funds - forget it. Only one loser - the 10 local authorities.

End of discussion
Point 6 - I am NOT a politician, nor am I planning on standing for election. I apologise to every single person who has read the above for misnaming TfGM as GMPTE. I hereby stand corrected and will if necessary spend a suitable period in the stocks AS LONG AS you acknowledge re point 3 that according to the accounts of Manchester Airport Group for the past 4 published years that Bolton (then a 5% shareholder) received its share of dividends as follows: 2008-09 Total Dividend Paid (page 59 of accounts) £26m. Bolton share £1.3m 2009-10 Total (page 49) - £20m. Bolton share - £1m 2010-11 Total (page 55) - £20m. Bolton share - £1m 2011012 Total (apologies didn't note page but it's there) - £20m. Bolton share £1m So, with all respect, your statement in point 3 is overstated by a factor of 300-400%. Re your points about ownership of bus companies / TOCs - noted. But what relevance has that. My only comment about, what I inadvertently called GMPTE but which I now accept I should have called, TfGM, was that they appear to have an almost unlimited desire to spend Council Tax payers / fairpayers money on what I consider to be a white elephant such as a new Bus Station. Re point 2. No it may not be. Unfortunately (up until last year when equity was diluted by a sellout of a certain percentage - I thought it was 40%, but I'm quite happy with your 49% - to an Australian investor) the Councils owned 100% of MAG and had at least 2 Non-executive directors: Cllr Brian Harrison of Manchester and Lord Peter Smith (Wigan) / David Goodwin (Stockport) amongst them. Maybe you will agree with me about Non-executive Directors (like a bidet, they add a touch of class but noone knows what they are really for), but on behalf of the owners of the Airport (i.e. us, the Council Tax payers of Greater Manchester's constituent local authorities) they were part of management. Not controlling, I'll grant. Re your final point - no argument - once the Councillors have (in polite terms) spent it on grandiose self-glorification schemes, it's gone. But as I have pointed out before, it is tied up capital. Bolton pays a large amount on borrowed money in interest. It claims continuously it cannot spend on schools, on roads etc., but it has this massive 'investment' stashed away generating only a minor amount of return (in my view of the accounts). As I have said, we won't agree on this point - I have a fundamental belief in getting our money back from Councillors OF ALL PARTIES. Short trem investment maybe of cash balances to meet known expenditure. Speculative stock market investment by amateurs against the big Infrastructure hedge funds - forget it. Only one loser - the 10 local authorities. End of discussion SmoggyDiasboro

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