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.”
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Teesside Airport to get extra £10m from public purse
By Stuart Arnold (Northern Echo)
1st July 2021
TEESSIDE Airport is to get an extra £10m as part of a ‘refresh’ of what the Tees Valley Combined Authority (TVCA) spends its money on.
TVCA said the cash would “enable the airport to stay on track for its recovery plan” after commercial revenues were hit by the covid-19 pandemic.
The proposed move was defended by Tees Valley Mayor Ben Houchen who said the airport had “achieved much more and much faster in its turnaround over the past year” than what could have been expected.
But it provided further ammunition for critics of Mr Houchen who believe the airport has become something of a cash cow. [aka cash sink …]
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.
It 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 and other improvements.
Stockton North MP Alex Cunningham said: “This £10m extra is additional to the many tens of millions he [Mr Houchen] spent buying the airport and he’s still paying a private company to run it.
“There may be some good things in his new financial plan, but this is another £10m he could have invested in developing and running a public transport service, which will ensure that people can get a bus or train to work and back home again.
“He may have fulfilled a pledge to buy the airport, but I have no doubt the vast majority of the public who can’t afford to take a flight would rather he addressed the needs of everyone, not just those who can afford foreign holidays.
“The time for vanity projects is at an end – it’s time he started to deliver on the real needs of our people.”
Asked if he was comfortable with the extra cash for the airport, Liberal Democrat councillor Chris Jones, a member of the overview and scrutiny committee at TVCA, said: “Not really no, it’s something I would like to look into and what, if anything, is going without to provide that funding.
“It’s a big chunk of money from the public purse.”
The Local Democracy Reporting Service (LDRS) contacted Stockton Council leader, Councillor Bob Cook, a member of the cabinet on the combined authority, which is expected to rubber stamp the updated investment plan later this week, but he said he did not want to comment.
The plan, which is worth £1.2bn over the next eight years and will finance business growth, transport, culture, and job creation, sees an extra £10m go towards the so-called Indigenous Growth Fund, which since 2019 has provided £50m for local councils to regenerate town centres and local communities.
An extra £5m will also be provided to boost business support for small and medium sized businesses across the region as part of a £300m plus war chest for business growth, which aims to deliver new jobs.
Referring to the criticism of his continued investment in Teesside Airport, Mr Houchen said: “Over the past year, Teesside Airport has achieved much more, and much faster, than we could have ever expected in its turnaround plan.
“It has secured a low-cost carrier and new domestic and international routes with some of the biggest airlines and holiday companies such as Loganair, Ryanair and TUI.
“This has all allowed us to bring our terminal redevelopment forward, giving us an airport fit for the future, supporting local businesses in the process.
“The aviation industry has been one of the hardest hit by the coronavirus pandemic.
“UK airports are set to lose £2.6bn in revenue in summer 2021 alone according to the Airport Operator’s Association, a body representing airports across the country.
“We’re working hard to make sure our airport doesn’t bear the brunt of a global pandemic.
“Let’s not forget, if our airport hadn’t been brought back into public ownership it would be closed by now, with 350 homes built on the airport terminal’s car park.”
Mr Houchen added: “By expanding the Indigenous Growth Fund local council leaders have the cash they need to push forward with ambitious regeneration plans that will create the skilled well-paid jobs we all want to see come to our region.
“It also means they have the resources they need to support communities and our amazing local businesses bounce back from the pandemic.
“Small and medium sized businesses are the lifeblood of our economy – they account for more than 99% of all businesses and support tens of thousands of jobs.
“Every week I meet fantastic business owners who are achieving amazing things right across Teesside, Darlington and Hartlepool.
“This fresh funding for them will mean we can support more firms to grow and create more good-quality, well paid jobs for local workers.”
Teesside International Airport Limited is governed financially by the combined authority via another limited company, Goosepool, both being subsidiaries of TVCA, a structure which has been criticised by some for its apparent lack of transparency.
Airport operator Stobart Aviation, which operates Teesside Airport, has a 25% shareholding in Goosepool, and its directors include Kate Willard from Stobart and TVCA chief executive Julie Gilhespie.
The LDRS revealed last November that the airport made a £2.6m loss in the previous 12 months.
Financial support has been provided to the airport by TVCA after it was forced to close its doors for a period in 2020 when the coronavirus outbreak grounded planes, while a £471,000 grant was also awarded by the Government to cover the cost of the airport’s business rates.
TVCA’s investment plan is reviewed annually and cabinet papers state Mr Houchen requested a further refresh following his re-election last month to “take cognisance of the impact of covid-19 and to consolidate funding received outside of the investment plan into the investment plan going forward”.
A £4.2m underspend from an education, employment and skills strategy is proposed to be re-allocated to support the region’s recovery from covid-19.
Meanwhile already-funded projects to extend the platform at Middlesbrough railway station and highways improvements to the A689 road at Wynyard have been removed from the investment plan with £4.68m also going towards covid recovery as a result.
https://www.thenorthernecho.co.uk/news/19411672.teesside-airport-get-extra-10m-public-purse/
Covid-19: Bail-out for Teesside Airport ‘significantly smaller’ than at other airports
By Stuart Arnold (The Northern Echo)
4th July 2021
TEES Valley Mayor Ben Houchen says a £10m bail-out for Teesside Airport is “significantly smaller” than the financial support provided to other regional airports.
Mr Houchen suggested the sum was the “hole created” by the coronavirus outbreak which grounded planes and hit commercial revenues at the airport.
The cash was requested by the Conservative mayor as part of a rejig of the Tees Valley Combined Authority’s (TVCA) investment plan.
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.
It has also provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure, which has helped pay for a revamp of the airport terminal along with new passenger lounges, bars and restaurants.
Stockton North MP Alex Cunningham has labelled the continued public investment in the airport as a “vanity project” of Mr Houchen’s and suggested many Tees Valley residents could not afford to fly abroad in order to take a foreign holiday.
Mr Houchen told a meeting of TVCA’s cabinet that there was a “lot of misinformation out there at the moment” in terms of the position of the airport, which is subject to a ten year ‘turnaround’ plan previously agreed by local council leaders as part of the deal to buy it.
He said: “Other airports have suffered significantly more than Teesside Airport has.
“When we bought Teesside Airport it was in a very sorry state as a result of Peel running it into the ground and making it very difficult for the local authorities to change the direction of it.
“It was in such a state that it was very difficult for the airport to do worse.
“I get the impression that we have actually ridden covid as an airport much more effectively than other airports because the distance we had to fall was significantly lower.
“We’d rather we were profitable, but the whole purpose of the ten year plan was it was going to take time to turn it around and we are in the [upward] curve.
“To do a comparison with the Liverpool City region combined authority, who have no financial interest whatsoever in Liverpool John Lennon Airport, they have just provided a £34m bail-out, so when you compare the bail-outs that other airports have had ours is significantly smaller because of the plan we have put in place.”
Recently Luton Airport was loaned £119m by Labour-run Luton Council as a support package to help it recover from the pandemic.
Mr Houchen said: “The £10m that we need for the airport is because there is a financial loss to the airport as a result of covid – there isn’t a single airport in the country that hasn’t been affected because of covid, most disproportionately more than ourselves.
“We need this to continue to meet our ten year plan – that’s the hole it’s created in the current plan.
“Subject to the impact of covid, we do continue to be ahead of that ten year plan with the likes of Loganair, Eastern [Airways], Ryanair, and TUI starting next year hopefully.”
Middlesbrough Mayor Andy Preston, a member of Mr Houchen’s cabinet, claimed the £10m was a “relatively small amount”.
He said: “Around the country there have been far bigger bail-outs of all kinds of businesses.
“This is a fantastic asset, a business with a future, and in the great scheme of things this is a very small financial support for our strongest asset as a region.”
Teesside Airport is governed financially by the combined authority via a limited company, Goosepool, a subsidiary of TVCA.
The company Stobart Aviation, which operates Teesside Airport, has a 25% shareholding in Goosepool.
The Local Democracy Reporting Service revealed last November that the airport – which has also received a £471,000 grant from the Government to cover the cost of its business rates – had made a £2.6m loss.
Speaking in August last year, Mr Houchen said the airport would continue to lose money for a “few years to come”, but predicted it could start to move into profit in year six or seven of the ten year plan.
He said: “People know this isn’t going to be the biggest airport in the North of England in the next 12 months, but they can see the direction of travel.
“They believe in the airport and they want to use it.”
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See earlier:
New Heathrow flight for Teesside Airport as Loganair to begin service in March
18.1.2021
Agreements have been reached with major airlines allowing passengers to travel on one ticket for onward international journeys. A new route between Teesside International Airport and London Heathrow has been announced. Loganair will initially operate a service twice a day Monday to Friday with a single flight on Sundays from March 8. Weekend services are expected to increase to one morning flight on Saturdays and two on Sundays from March 28. Loganair has also secured partnerships with some of the world’s biggest airlines, including British Airways, KLM, Air France, Emirates, Turkish Airlines, United Airlines and Qatar Airways to provide international travel for people from Teesside, the North East and North Yorkshire.
https://www.gazettelive.co.uk/news/teesside-news/new-heathrow-flight-details-teesside-19642286
Teesside Airport flight subsidy – an unknown amount of public money – divides mayoral contenders
New flights from Teeside airport (used to be called Durham Tees Valley airport) are being subsidised by taxpayers. Tees Valley Combined Authority (TVCA) has contributed funds to support six routes from the airport. The amount has not been released due to “commercial sensitivity” but it was believed in 2018 that there would be subsidies of £1 million over 3 years. Now Tees Valley mayoral candidate Jessie Joe Jacobs said the figure should be made public. She said: “If subsidies are going to flights, are we going to see subsidies for buses for places like Port Clarence, where people cannot get to their local hospital without getting a taxi?” With more awareness of climate breakdown, flying shame and increased rail usage, is helping people to take domestic flights sensible use of scarce public funds? The airport was brought back into public hands at the start of last year for £40m as part of a £588.2m investment plan agreed by Labour council leaders and Tees Valley Mayor Houchen. It is owned in a 75/25 split between the TVCA and Stobart Aviation. Its business plan forecasts losses until 2025 after which it just might make a small profit. But who knows, so far ahead. Voting in the mayoral elections will take place in May.