Birmingham airport hands out £13 million share dividend to Birmingham City Council
Birmingham Airport managed to handle 9,119,709 passengers in 2013, which was the highest since 2008 and up + 2.3% compared to 2012. The 2013 number is still around 4.7% lower than the 2008 peak, but has been growing slowly since 2010. Most passengers continue to be on leisure trips, including long haul leisure, for example to Barbados and Gambia (those “seeking some winter sun over the Christmas break”). The airport hopes its runway extension will open during 2014, enabling flights by larger planes to long haul destinations. More passengers travel out from the area, on holiday trips, than travel in though the airport wants to attract more visitors from South-east Asia. Birmingham City Council, with 6 other West Midlands local authorities, owns 49% of the airport and has been handed a £13 million dividend after the airport had a “successful” year and reappraised its finances after the imminent completion of the runway extension. This will help fund the £5 million budget black hole in Birmingham’s 39 leisure centres and swimming pools. Birmingham and the other councils had earlier agreed to sacrifice dividend payments to help fund the £33 million runway scheme, and are now set to be rewarded for their generosity.
The CAA 2012 air passenger survey showed that at Birmingham the proportion of travellers on business was 22.5% (15.2% international) http://www.caa.co.uk/docs/81/2012CAAPaxSurveyReport.pdf
UK Airport Statistics: 2012 – annual (Table 10.3) Terminal Passengers 2002 – 2012
2009 9,093,735 (down – 5% on 2008)
2008 9,577 (up 5% on 2007)
Birmingham City Council announces the safe arrival of £13m airport share dividend
Birmingham Labour councillors are in the almost unheard of position of discussing which public spending cuts to restore following a series of surprise upturns in the city council’s finances.
A controversial £125 million savings plan for 2014-15 looks like being scaled back to about £75 million after last minute changes to budget projections, including a £13 million windfall share dividend for the council from Birmingham Airport.
Council leader Sir Albert Bore told a Labour group meeting he discovered “a few weeks ago” that the local authority would be receiving £13 million from its airport shareholdings.
The payment reflects a reappraisal of the airport’s finances following completion of the runway extension, which is imminent.
Birmingham and the six other West Midlands councils, which own almost half of the airport shares, agreed to sacrifice dividend payments to help fund the £33 million runway scheme, and are now set to be rewarded for their generosity.
The £13 million payment was described as a “windfall” by deputy council leader Ian Ward at a cabinet meeting. Just under half of the sum will be given to the city’s 10 district committees to stave off possible sports centre and library closures, and the remainder will be used to offset other cuts.
Chamberlain Files understands Sir Albert was quizzed by Labour councillors and asked to explain when he first knew about the £13 million dividend payment, since the figure did not feature in an extensive public consultation exercise about a £125 million council cuts package.
The possibility of a cash windfall from the airport was not raised by the council at any of the public meetings staged during the consultation period.
Details of the airport dividend are in the monthly revenue budget monitoring report dealing with the council’s finances up until the end of November 2013. But the first official confirmation of the surprise windfall did not come until the report was tabled seven weeks later at the January 20 cabinet meeting.
A council spokeswoman said: “The city council’s month eight monitoring report represents the earliest opportunity to report the income following the Airport Company’s approval to the additional dividend.”
Any debate about when the council first knew it would receive a cash lifeline from the airport may appear pedantic, but the absence of the figure could be used by anti-cuts protesters seeking to prove through a judicial review that the 2014-15 budget and consultation is flawed.
When he launched the consultation Sir Albert announced that the cuts package would not be as great in 2014-15 as originally feared, although he still expects to have to save almost £300 million in 2015-16 and to close down completely some non-statutory services.
Other changes to the 2014-15 budget include an assumption that interest rate do not rise and that there are no wage awards for council staff. Lower inflation and a better government grant settlement than originally envisaged helped bring the £125 million forecast down to £88 million.
But the actual savings figure should fall to £75 million following receipt of the airport share dividend.
The slimmed down cuts package represents the first reversal for Sir Albert’s Jaws of Doom graph, depicting the amount the council has to save between 2010-11 and 2017-18. The projected amount is £839 million according to the budget consultation booklet, but that figure will have fallen by at least £13 million thanks to the airport cash.
The arrival of the dividend could be used by Sir Albert to caution against selling the city’s ‘crown jewel’ assets such as the airport shareholding and the NEC Group. A final decision on major asset sales is likely to rest on whether a one-off lump sum payment to the council is preferable to smaller but regular dividend payments.
Passenger Numbers Continue to Climb at Birmingham Airport
17 January 2014 (Birmingham Airport press release)
Birmingham Airport is celebrating yet another major milestone, as passenger numbers for the 2013 calendar year reach over nine million for the first time since 2009.
Latest figures reveal 9,119,709 passengers chose to fly through Birmingham Airport in 2013, a 2.3% increase compared to 2012.
The nine million milestone was achieved after the Airport enjoyed a busy December, which saw 574,854 passengers pass through the terminal, representing an 8% increase compared to the same period last year. December also saw the largest monthly percentage increase in 2013.
The biggest growth sector in December was non-EU charter services (+12%) to destinations including Barbados and Gambia, fuelled largely by passengers seeking some winter sun over the Christmas break and opting to travel from Birmingham Airport.
Paul Kehoe, the Airport’s CEO, said: “2013 has been a fantastic year for us in many ways. In terms of passenger numbers, we’ve seen consecutive growth in the past eight months, which has led to our best yearly performance since 2009.
“Helped by a strong December, over nine million people have decided to take advantage of the Airport’s world-class facilities and its growing network of flights throughout the past 12 months.
“We are now looking to build on this success in 2014, which will see the opening of our longer runway and with it, the capability to serve more long haul destinations than ever before.”
Scheduled routes that experienced particular growth in December included Stuttgart (+89.2%), Milan (+81.7%), Chambery (+74.7%), Funchal (+65.4%), Istanbul (+45%) and Belfast (+40.2%).
Neil Rami, chief executive of Marketing Birmingham, added: “The Airport’s strong 2013 performance is testament to the ongoing activity to promote the Greater Birmingham and Black Country region as a popular visitor destination.
“Over the past 12 months we have undertaken marketing campaigns with our tourism partners at VisitEngland and VisitBritain to strengthen links with countries including Germany and Italy. The significant recent growth in passengers from Stuttgart and Milan indicates that our work to grow the region’s profile and reputation is bearing fruit.
“The prospect of more of the international business community being able to fly to and from Birmingham in future months thanks to the Airport’s runway extension, coupled with our current work with European funding partners to attract more visitors from Southeast Asia, shows that 2014 could prove to be even more successful.”
Charter services seeing an increase in passengers included Barbados (+70.2%), Gambia (+21.4%), Austria (+8.9%), Finland (+5.6%) and Spain (+5.3%).
Scheduled services seeing an increase accounted for 87.9% of all traffic, whilst charter made up the remaining 12.1% of passengers flying from Birmingham Airport during the month of December.
The top scheduled destinations in 2013 were Dublin, Dubai and Amsterdam, and the most popular charter destinations were Dalaman, Palma and Tenerife.
Birmingham Airport windfall digs council out of £5m hole
Funds derived from Birmingham City Council’s shareholding in Birmingham Airport have come to the rescue of its ailing leisure offer
A major £5 million budget black hole in Birmingham’s 39 leisure centres and swimming pools has been filled after the city council scooped a windfall from its shares in Birmingham Airport.
The council, along with the six other West Midlands local authorities, owns 49% of the airport and has been handed a £13 million dividend after a particularly successful year for the Airport, including the construction of the runway extension.
Now Labour bosses have decided to use £5.2m from the windfall to plug the deficit in leisure services and save the rest for any budget problems which develop during the 2014/15 financial year.
The council has agreed an overhaul of sport and leisure which will see some centres closed, six new ones built and outside operators brought in.
The funding will see the leisure service maintained until the new strategy is implemented and facilities built.