Luton scaling back airport expansion plans, delaying 2nd terminal, to save £1 billion
Luton Airport, which is owned by Luton council, is planning to scale back its expansion plans in order to save perhaps £1 billion. In 2019 the airport consulted on plans for a new terminal that would enable the annual number of passengers to be increased from 18 million to 32 million by 2039. There will now be a new consultation, later in 2021 or in 2022, for initially improvement of the existing terminal, and then eventually a second terminal, at some future date. The airport’s finances have been seriously hit by Covid. The Council benefitted greatly from the airport (before Covid), in 2019 receiving a £19.1m, and £15.8m servicing debt. In 2020 the airport had huge public subsidy, and more will follow for 2021. Local campaigners will be looking very carefully at what might emerge from proposals for further passenger growth using the existing terminal. This might be by creative use of “permitted developments” which Luton Borough Council could approve on its own. If such growth could accommodate more than an additional 5 million passengers per year (taking Luton to 23Mppa) it would then become possible for the declared ambition to reach 32Mppa to be achievable without need for a DCO, as below the 10 Mppa threshold.
Luton rethinks airport expansion plans
18 MAY 2021
BY JONATHAN KNOTT (LGC)
Luton Airport, wholly owned by the town’s financially-struggling council, is scaling back its expansion plans to save “the best part of £1bn” on its original £2.4bn price tag, LGC has learned.
In 2019 London Luton Airport Limited, run through a Luton BC subsidiary company, consulted on plans that would see a new terminal built with annual passenger capacity increasing from 18 million to 32 million by 2039, concluding the consultation process in December 2019.
It now intends to begin a new full consultation on revised plans later this year or next year, the firm’s chief executive Graham Olver told LGC. These would consist of two stages, with an initial focus on improving the existing terminal, followed by the construction of a second terminal “at some point in the future”.
MPs from constituencies near the airport have recently spoken out against the expansion plans, citing concerns including noise and environmental impact, but the pandemic has also had a devastating impact on the airport’s finances.
Before Covid, the airport contributed a significant amount to the council’s income, providing a £19.1m dividend in 2019-20, £15.8m servicing debt and a further £9.9bn [sic] for local charities and community groups. The airport says it has provided £287m to the council since 1998 in dividend, rents and payment for services.
But last year the council had to borrow £60m from the Public Works Loans Board and lend it to LLAL to ensure its stability as the pandemic resulted in a collapse in passenger numbers. Luton BC was also granted a £35m emergency capitalisation direction for 2020-21 by the government in February, with a further £14m expected this financial year. This support is tied to an assurance review that will explore “reducing the council’s financial exposure to the airport”.
Mr Olver said that following the previous consultation, “we put in place a check and challenge review”, asking: “Is this project the one that the people in Luton, the community and our neighbours really want or need? Or is this something that we could look at and try and improve on?”
“We gave ourselves some really tough challenges, including the capital cost of the development, but importantly, also the impact on the environment,” he said.
He said that discussions about “150 different scenarios about the way in which we could improve the development” had resulted in “taking out and changing the earthworks” that were originally planned for the new terminal.
“We effectively save the best part of a billion pounds worth of expenditure,” said Mr Olver. “But equally, the disruption that you would have had has disappeared.” He claimed such a redesign would save a volume of earthworks equivalent to “the second biggest pyramid in Egypt”.
He said the expansion was now envisaged in “two stages”, because the “first rule of sustainability” is to “make the most of the assets you’ve already got”.
The airport had been discussing “how we make the most out of terminal one, roll that out to have some part of the progression, and then build terminal two at some point in the future”, Mr Olver said.
This second stage could be “seven, eight years plus in the future. But of course, it has to match demand as well,” said Mr Olver, who noted the importance of getting “the balance right between the demand and the construction timetable”.
He said of the new strategy: “We build it for less – so the price of it is less; we make the most of the existing assets that we’ve got. And we make sure that we’re robust and resilient to keep putting this money back into the council and the community for the highest possible impact.
“We were clearly disrupted by Covid…but now we’re at a point where we absolutely believe, and all the evidence supports us, that we’ve got a good viable project, that we’re doing the right things.”
The aim was still to increase capacity from 18 million to 32 million passengers a year, he said.
Mr Olver said the airport had “completely reinvigorated” its approach to sustainability, claiming the new plans would be consistent with a pathway towards net zero carbon that aligned with the council’s declaration of a climate emergency in 2020.
He said the council was “trying to put in place a regulatory structure” that would ensure “managed green growth”.
Explaining how this framework would work, he said: “We promise we’re going to hit these targets, we promise we’re going to monitor them…and we will make sure that future developments can only happen if it fits inside the prescribed envelope.”
He said this was “a real major effort to put our money where our mouth is, and come up with something that is consistent with the feedback we received at consultation”.
“Once we completed that, we’d expect to go out to another full consultation,” he said, which would be “towards the end of the year, maybe even into next year”.
Mr Olver said it was important “to look at value across the whole system”, giving equal weight to the “social, economic, and environmental” impact of the airport together with its surrounding community and infrastructure.
Luton Airport expansion plans change – but passenger numbers could still almost double
Wing residents have raised concern about growth plans, says newly-elected councillor
By Sally Murrer (Leighton Buzzard Observer)
Wednesday, 19th May 2021,
The Luton Airport expansion plan from the council’s airport company has been pushed back four years and tweaked to become ‘leaner greener and cleaner’ with £1bn of savings.
This is a third shaved off the £3n price tag. But passenger numbers will still almost double eventually to a massive 32 million a year.
Luton Borough Council, which owns the airport through subsidiary company London Luton Airport Ltd (LLAL), has now announced its change of plan following public consultations and feedback about the expansion.
“We have reviewed and carefully considered all of the feedback we received. One clear message we received is that people want us to go even further in managing our environmental impacts, including noise, air quality and climate change,” said an LLAL spokesman.
The new plan will be submitted next year and will have to go to the Secretary of State for consideration. Full details have not yet been disclosed but the Luton News can reveal Terminal Two will NOT go ahead when originally planned.
Completion of the proposed development has been shifted back around four years, from reaching capacity in 2041 to 2045. And the scale of the earthworks will be “significantly reduced” without affecting the ultimate 32 million passenger aim.
LLAL had initially sought to increase capacity to 38m annual passengers by 2050, with plans due to be submitted to the government in June 2020. This capacity was later reduced to a proposed 32mppa.
The proposed capacity differs greatly from the more modest plan submitted last December by the company that actually operates the airport, London Luton Airport Operating Ltd (LLAOL).
LLAOL wants to change the airport’s current capacity of 18 million passengers a year to 19 million.
With their application due to be considered by Luton Borough Council’s planning committee within the next few months, LLAOL insist its target will be achieved without any changes to infrastructure.
Instead they would use larger aircraft and increase passenger numbers during non-peak times of the year.
The company is also seeking to reduce noise conditions both day and night, to reflect “a slower than anticipated” introduction by airlines of the next generation of quieter aircraft.
Technically there is no reason the two plans cannot go ahead simultaneously, with the 32mppa scheme remaining a longer term, more ambitious project.
The LLAL spokesman said: “To date we have conducted two public consultations on our proposals, to seek feedback on how we propose to deliver a second terminal and associated infrastructure to deliver growth from the airport’s current permitted capacity of 18 million passengers per annum (mppa) to 32 mppa by 2041.
“We are currently continuing to invest more time to take a fresh look at every aspect of the sustainability of running an airport. This includes developing an innovative and ground-breaking initiative to ensure that all future growth at Luton can be green growth.”
He added: “Our approach will set out a path to meet our ambition to become the UK’s most sustainable as well as its number one community airport owner. It will also help us meet the challenge of responding to the challenges of supporting essential recovery from the impacts of coronavirus and building back better.
“We are an airport owner entirely focused on supporting and improving people’s lives, and driving economic and employment growth, both in Luton and neighbouring communities. We see it as vital that we continue to plan for how prudent investment in our stewardship of the airport can continue to benefit future generations.
“We remain committed to engaging with our communities and all those with an interest in the future of London Luton Airport. We will be undertaking a further period of consultation on our proposals before submitting our application to seek permission for long-term and sustainable growth of London Luton Airport.
“It is estimated that whilst it will still be a significant enterprise, the scale of the earthworks will be significantly reduced, accounting for a majority of the £1bn savings we anticipate. We are still intending to apply for a DCO next year. It will continue to seek consent for expansion to 32mppa and for a second terminal but we anticipate it will be completed at a later stage in the process.”
The spokesman concluded: “To this end we don’t believe the people in Luton will necessarily regard this as ‘scaling back’ of our plans. We hope they acknowledge our commitment to significantly improving the airport’s environmental impacts and determination to work up a pioneering approach to green managed growth that will monitor, measure and use environmental impacts to support the airport’s growth rather than passenger numbers alone.”
Residents in the Wing area have been expressing their reservations about the airport’s expansion to local politicians.
Meanwhile newly-elected Buckinghamshire Councillor for Wing, Diana Blamires, told the LBO: “During the election campaign on the doorstep a number of people said they moved to the Wing area partly to get away from pollution so were concerned about the number of planes above from Luton. Plans for the expansion of Luton Airport would increase pollution. At a time when flying habits are changing the question of the need for Luton to expand needs looking at again.”
Buckingham MP Greg Smith said: “I and a number of other MPs for the local area expressed concerns about plans for expansion of Luton Airport. The environmental damage and the noise pollution would not seem to be justified by the increased capacity at a time when people are flying less and when it is expected changing work patterns will lead to fewer flights.”
Local group, LLATVCC commented:
Planning Application 21/00031/VARCON
The proposal to grow by “only another million” At the date of writing (mid-May), there has been no decision by Luton Borough Council as to whether it would grant this application, which would in effect “legitimise” the continuing breach of planning conditions on the subject of noise disturbance from its airport.
The results of Covid lockdown on passenger numbers have called into question the urgency of this application as the growth curve for passenger numbers has taken a dive, but we sense from the tone of discussions at the airport Consultative Committee that the airport operator has some anxiety over airlines choosing to desert Luton if they could not see a firm long-term commitment to its growth.
The effects on airlines’ ability to fund the replacement of noisier aircraft, on which the environmental statements which supported that application depend, may have become an issue.
We’d already understood that an application for a Development Consent Order (DCO) to construct a second terminal and associated works would not be submitted this year and work is in hand to make the application the greenest possible.
Quite how this will play against the Government’s inclusion of international aviation in the UK’s carbon budget very much remains to be seen – the airport owner LLAL has insisted that its airport is already almost as green as it could be and contributes “only” around 4% of all the greenhouse gas emissions from flights which use it.
The extent to which even the very local component of the landing and takeoff cycle, which on average (a slightly misleading statistic) consumes 40% of the fuel burnt on the average flight and thus the CO2 generated, was factored into that assertion isn’t clear.
Given that the preponderance of Luton flights being of relatively short duration, with low-cost carriers keen to operate as many daily cycles as possible, their landing and takeoff cycle fuel burn would constitute more than the overall 40% average, which is for flights of all lengths and durations. So there will clearly be a lot of new and creative arithmetic to be done to support the application – we may see a hint of it when we are involved once more with the Design Group working on the design of a noise envelope for an expanded airport.
One would have thought that, in the light of the change of Government policy on the carbon budget now having to incorporate international aviation, airports with inclinations to expand would have put such plans on “hold”. The recent plan to grow Leeds/Bradford was called-in by the Minister, but we hear that Heathrow is once again buying up houses that would need to be levelled if their third runway scheme was to go ahead. It’s not easy to read the future….
Feb 18th – deadline for comments on application by Luton airport to increase passenger cap from 18m to 19mppa
Luton Airport has submitted a planning application (21/00031/VARCON) to Luton Borough Council to increase the annual cap on passenger throughput by 5.5% from 18m to 19mppa. Also to expand the day and night noise contours by 11.3% and 15.3% respectively until 2028, when they would be reduced somewhat, but still a net growth from today’s levels. Annual plane movements are forecast to grow by no more than 0.8%. The deadline for responses is February 18th. The airport is arguing that more larger planes means that the extra passengers can be accommodated without a huge increase in plane numbers. They also claim the anticipated new planes will be less noisy and emit less carbon … (’twas ever thus…) These wonderful planes or technologies don’t yet exist. The motivation for the increase in the passenger number cap has been rising demand, before the Covid pandemic struck. Future air traffic demand is uncertain. The “elephant in the room” is the conflict of interest of Luton Borough Council being both the planning authority and the owner of the airport. But Hertfordshire County Council is set to formally object to the plans, largely on grounds of noise nuisance.
Luton Council’s £60m loan to Luton Airport company set for approval ‘in private’
A £60m loan by Luton Borough Council to its airport company is set for approval, in private, by the executive later this month. The first of two emergency loans – together totalling £83m – has gained the support of Luton Council’s scrutiny finance review group, at the second attempt. The second loan worth £23m to London Luton Airport Limited (LLAL) is scheduled for the 2021/22 financial year, after the council’s emergency budget in July. The Labour controlled council were forced by the Liberal Democrats to discuss the loan report in public. But officers asked for the council to take legal advice and defer the issue. It seems that 5 five Labour councillors recommended the council’s executive approve the £60m loan deal, with the 3 Liberal Democrats in opposition. The executive will formally decide upon the loan at its meeting on Monday, September 14th. The Liberal Democrats said the almost £400m in loans are secured against the assets of the company. But, the council already owns all of LLAL’s assets by virtue of its 100% ownership of the company. It follows that for all practical and accounting purposes the £400m loans are unsecured.”
Hertfordshire County Council objects to Luton Airport expansion, due to negative environmental impacts
Proposals to expand Luton Airport have been described as “madness” by a Hertfordshire county councillor. The council unanimously voted to oppose further expansion of Luton airport at a meeting on 26th November, as they realised the expansion plans to increase to 32 million passengers a year by 2039 (from almost 17m now) would harm the environment. The airport’s proposals – to be decided by Luton Borough Council – include a second terminal north of the runway, an extensive new airfield infrastructure and a third station. There is a huge conflict of interest, as Luton Council both owns the airport, and decides on its planning applications. At a time of growing realisation of the climate crises the planet faces, and with no realistic ways to reduce the carbon emissions from aviation, the industry should NOT be given permission to expand. The growth plans of airports across the country add up to a massive expansion in the number of flights and passengers, way above what could be compatible even with aiming for net-zero carbon by 2050 (and that is at least 20 years too late). The motion also called for Luton’s plans to be deferred until the new government has set out the Aviation Strategy, for the UK aviation sector, taking into account the advice of the CCC.