Local Authorities must question if it is justifiable, or a financial asset, to own an airport
There is a glaring logical inconsistency between the declaration of “climate emergencies” by councils, and the backing of local airports. That is particularly the case where the airport owns, or partly owns, the airport. The Local Government Chronicle has written that “councils’ declarations of climate emergency will be mere weasel words unless they lead to painful but necessary decisions being made.” To achieve action on climate, councils need to take urgent and significant action. Helping an airport expand and increase its number of passengers, flights and CO2 emissions should no longer be happening. And while some airports were useful sources of income for councils in pre-Covid years, there is no certainty at all that will continue. Instead airports have been a sink for public money over the past year. Councils should not attempt to confuse the situation, by claims that airports are cutting carbon, becoming carbon neutral etc. That is only for their buildings, conveniently ignoring the carbon from the flights the airport facilitates. Councils need to accept that the restoration of passenger numbers to previous levels is not desirable.
Airport growth is incompatible with climate emergency
15 JUNE 2021
BY NICK GOLDING
Local Government Chronicle
Councils’ declarations of climate emergency will be mere weasel words unless they lead to painful but necessary decisions being made, writes LGC editor Nick Golding in the leader article for June’s LGC magazine.
The declarations of a climate emergency now made by three-quarters of UK councils need to be followed by urgent and significant action.
It is an ‘emergency’, after all – the clue’s in the name. If councils’ promises in relation to the gravest crisis facing the world are to be honoured, a complete rethink of many spheres of life, work and economic activity is required. It may therefore surprise many that a number of councils that have declared climate emergencies own airports, and some still plan to expand them.
While growth in aviation has previously had a positive impact on economic growth, [perhaps, though in 2019 there was a UK £33.5 billion tourism deficit…] and facilitates the cultural enrichment and personal vitality that results from foreign travel, it comes at a terrible cost to the climate.
Any increase in aviation will make it harder for the UK to honour its commitment to net zero emissions by 2050. Committee on Climate Change chairman Lord Deben (Con) has warned that zero carbon aviation is “unlikely to be feasible” by then, with aviation becoming the “largest emitting sector in the UK”, even allowing for improvements to fuel efficiency and the limiting of demand growth.
In a 2019 letter to transport secretary Grant Shapps, Lord Deben said of airports: “Investments will need to be demonstrated to make economic sense in a net-zero world and the transition towards it.”
“No council should be contemplating airport expansion”
Local government has sought to justify its expansion of airports. Greater Manchester CA mayor Andy Burnham (Lab) has previously insisted the growth of his city’s airport from 25 million to 45 million passengers annually by 2045 will be the result of “taking passengers from other places”, not extra journeys overall.
Meanwhile, Graham Olver, chief executive of the Luton BC-owned London Luton Airport Ltd, told LGC increasing passenger numbers from 18 million to 32 million annually was compatible with the council’s “completely reinvigorated” approach to sustainability, and that a “regulatory structure” would ensure “managed green growth”.
Sadly, such claims are unconvincing. There is no impending technological breakthrough sufficiently profound to allow a growth in aviation without contributing to global warming (at least without heaping even more of the burden of transitioning to net zero onto other sectors).
And even if levelling up might legitimately mean a bigger proportion of UK flights from airports outside the south-east, this surely should mean other regions’ airports contract less, rather than grow more.
LGC – Local Government Chronicle – this month examines the impact of Covid-19 on council-owned airports, with the five biggest seeing drops in passenger numbers of 70-85%.
This has had a disastrous impact on their staff and the broader local economy, as well as upon council coffers: authorities such as Luton and Greater Manchester’s 10 metropolitan boroughs have been heavily hit, with Luton so badly affected it required a £35m government bailout.
As painful as it might be for the places and the workers involved, the restoration of passenger numbers to previous levels is not desirable.
Indeed, with the rise of the video meeting in the past year, one might expect business travel in particular to dramatically decline.
It is hard to see airports again offering councils the commercial returns to which they have grown accustomed and, when it comes to jobs, a sustainable local economy is more likely to be one that isn’t dependent on pumping CO2 into the atmosphere.
If the government is serious about greening the economy and ensuring local government is financially sustainable it should offer support to help the most airport-reliant councils wean themselves off aviation. No council should be contemplating airport expansion and all councils should be rethinking their economic plans to reduce dependency on aviation. While the environmental credentials of HS2 are doubtful, its construction needs to open the way to rail’s replacement of flight for short-haul journeys and councils would be better advised to focus on this, rather than air travel. A climate emergency declaration amounts to nothing more than weasel words unless bold action is taken to prevent environmental catastrophe.
Turbulence ahead: how Covid and climate concerns have hit council-owned airports
15 JUNE 2021
BY JONATHAN KNOTT
Council-owned airports have gone from cash cow to a drain on resources during the pandemic – and climate concerns have raised fundamental questions about their future. Airports have been a crucial factor in a number of councils’ drives to boost economic growth and generate a…
Teeside Airport bottomless pit for council cash – given another £10 million by TVCA
Teeside Airport is to get an extra £10m from the Tees Valley Combined Authority (TVCA), hoping to keep it afloat after Covid impacts. TVCA spent more than £40m buying the loss-making airport in 2019 following a previous election pledge by Mr Houchen to take it back from previous owner Peel. TVCA has also provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure, which has helped pay for a multi-million pound terminal redevelopment, new passenger lounges, bars etc. The Local Democracy Reporting Service (LDRS) said in November 2020 that the airport made a £2.6m loss in the previous 12 months. Its advocates say it could be profitable in about 6 years. Teeside Airport Ltd is governed financially by TVCA via another limited company, Goosepool, both being subsidiaries of TVCA, a structure which has been criticised by some for its apparent lack of transparency. Stobart Aviation, which operates Teesside Airport, has a 25% shareholding in Goosepool. Opponents of the handouts to the airport say too much is being spent on the airport and “The time for vanity projects is at an end – it’s time he started to deliver on the real needs of our people.”
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.”
Manchester Airports Group to get £260m that its 10 council owners borrow from government
In the absence so far of financial support from government, the ten Greater Manchester local authorities – which have a majority stake (64.5%) in the Manchester Airports Group (MAG) – are planning to borrow themselves in order to lend £250 million to it. MAG owns Manchester, Stansted and East Midlands airports. The councils have privately agreed to take out significant levels of low-interest borrowing from the government’s loan board. They may not start to see any repayments for a couple of years, but are hoping that by that point it will have returned to some semblance of normality. Manchester council is expected to provide the biggest share of the loan package, at around £143m, in line with its larger stake in the company. It is understood the other nine boroughs are expected to put in £13m each. Senior local authority figures said the move was aimed at protecting significant long-term town hall investment in the airport, along with safeguarding tens of thousands of jobs that rely on it as a major engine of the local economy. Manchester airport still has a couple of arriving flights per day. It is possible that as many as 50,000 jobs may be directly, or indirectly, linked to the airports. If the sector has to shrink in future, many of those jobs may be lost.
Coronavirus: Areas reliant on aviation industry ‘to suffer worst’ – especially Crawley, too dependent on Gatwick
The Think Tank, the Centre of Cities, believes jobs in cities and towns which depend on the aviation industry will be most under threat by the coronavirus crisis. They estimate about 20% of jobs in these areas are vulnerable to the economic impacts of Covid-19. The economy of Crawley is likely to be hardest hit, as it is too dependent on Gatwick. More than 53,000 jobs are classed as vulnerable and very vulnerable in Crawley, of about 94,000 in the area. About 18% of jobs in Crawley are in aviation, compared with 1% on average across other big towns and cities. There are a lot of taxi drivers, whose work depends on the airport. People have warned for years about the dangers of areas “having all their eggs in one basket” on jobs, with too high a dependence on one industry. As much of the UK airline sector has almost closed down, with at least a 75% cut in flights at Heathrow, and over 90% cut at Gatwick, almost no flights using Luton, and so on. Luton is another town that is overly dependent on the airport, and now suffering. Also Derby and Aberdeen. The areas worse affected by job losses due to Covid-19 will be asking for government help, once the lockdowns are lifted.