Luton airport continuing to be a financial drain (maybe £550 million+) to owners Luton Council
In the last few days, the company (owned by Luton Borough Council) that owns Luton Airport, has changed its name from London Luton Airport Ltd, to Luton Rising. That will be its trading name. The company that operates the airport is London Luton Airport Operations. London Luton Airport Operations has obtained agreement from Luton Rising that it can retain £45 million over three years. This will support the airport’s recovery from the pandemic. The money would have been paid by the operator to Luton Rising (ie. the council) if it had not been for the impact of Covid reducing passengers and flights. Luton council usually, pre-Covid, made a good profit from the airport, but that has now been reversed. The Council in 2019 receiving a £19.1m, and £15.8m servicing debt. In September 2020 there was a £60m loan by Luton Borough Council to its airport company and it was expected that another £23 million would be paid. Then in June 2021 Luton Council loaned a further £119m to the airport. Now this is another £45 million, over three years. The airport is not looking like a great investment for the council …
Luton Airport operator to retain £45m due to council
The operator of London Luton Airport will retain £45m that should have gone to the airport’s owners, a Luton Borough Council company.
Luton Rising, a Luton Borough Council company that owns London Luton Airport, has agreed with its operator, London Luton Airport Operations, that it can retain the money over three years.
The agreement will support the airport’s recovery from the pandemic.
In a joint statement the companies said it would “provide certainty” for those who rely on the airport for employment.
Alberto Martin, chief executive of London Luton Airport Operations, said the deal “creates reassurance for the thousands of people and the many local businesses who rely on us through the supply chain”.
The airport supports 27,000 jobs and £1.8bn in economic activity, Luton Rising said.
The operator will “retain £45m over a three-year period from past and future passenger income that would have been due to Luton Rising had passenger numbers not reduced”, the statement said.
As part of the airport’s recovery from the impacts of coronavirus, the operator has committed to “delivering the real living wage for all its direct employees during 2022, and the reintroduction of a dedicated taxi rank for local Hackney Carriage drivers”.
Luton Rising and London Luton Airport Operations Ltd will also work on “ambitious sustainability and net zero strategies”, the statement said.
Graham Olver, chief executive of Luton Rising, said: “This agreement sets out how we will continue to work together over the coming decade to build back better, stronger and greener, and support the vital economic and employment recovery that we will want to see in the supply chain and across the region.
“Importantly for Luton residents, this has also been achieved with no direct impact on council tax, and continues to protect the vital investment we make every year in voluntary and community services to improve people’s lives.”
Luton Airport loaned £119m by council as pandemic measure
29 June 2021
The council also borrowed £60m last year for Luton Airport
A council is to loan a further £119m to the airport it owns to help it recover from the coronavirus pandemic.
Labour-run Luton Borough Council agreed on the support package for London Luton Airport Ltd at a meeting on Monday.
Andy Malcolm, portfolio holder for finance, said if the loans were not agreed the council would have to “sell its most valuable asset”.
The total loaned to the airport now stood at £507m, including £124m “in response to the pandemic”.
Andy Malcolm said “the airport has been very good to us as a the town and it will be again”
The Liberal Democrat opposition leader David Franks has claimed the airport has been given “sacred cow status”.
The council’s Executive Committee agreed to the loan totalling £119m, plus a contingency of £20m, which the authority said took “the total current package of loans available from the council to LLAL [London Luton Airport Ltd] to £507m”.
Labour said the funds would be borrowed on behalf of LLAL, of which the council is the sole shareholder, and would be used to “stabilise” the company and fund infrastructure projects such as a new business centre.
The council added that the loan would not have an impact on council services or the level of council tax and LLAL would pay the interest.
The day-to-day running of the airport is carried out by a separate private consortium, which is not a beneficiary of the loan.
Details about the financial support package were not discussed in public at the meeting and Mr Malcolm said they had “no choice” to hear them in private because of commercial sensitivities.
He said other UK airports had also increased borrowing to “navigate the impacts of the pandemic”, and said it was “our duty as councillors to ensure our town recovers in the best way possible”.
He added: “Our airport has been our biggest success story over the last two decades, providing financial support for frontline services, countless partners in the community and the charity sector.
“Agreeing these funds will ensure that’s the case for the next 20 years and beyond.
“We’re in a dip at the moment and the biggest thing is about getting through that dip.
“Without agreeing these loans, the council would be left with little choice but to sell its most valuable asset at a time when it couldn’t achieve a fair – let alone optimum – price.”
Luton Rising: New branding revealed for company that owns London Luton Airport
‘Inspiring’ identity will reflect its mission to deliver expansion, jobs and economic growth
Luton Rising has this afternoon been revealed as the new trading name for London Luton Airport Ltd, the owners of the airport.
Its sole shareholder is Luton Council and Luton Rising’s chairman Cllr Javeria Hussain has today explained the reason for the new brand.
She said: “As we enter a very exciting period for our organisation, we wanted to express the spirit that we are more than an airport. Unlike any other major airport in the country, we are wholly community-owned.
“Our social impact comes not just from substantial financial contributions to Luton’s public services and community organisations (£412 million in total since 1998). It is also part and parcel of how we grow our business, such as developing a new, green innovation hub, and our inclusive employment initiatives.
“As the most significant business in the region, the airport generates 27,000 jobs and £1.8 billion in economic activity. Our other assets, such as the Luton DART, have given opportunities to hundreds of people to develop skills and begin their careers, and our business parks will take this further. This is key to achieving the town’s 2040 vision of a town where everyone can thrive and no-one has to live in poverty.
“Our proposals for future sustainable airport expansion will allow us to generate even more jobs and economic activity. It will also mean we will be able to provide more support to our frontline services and community organisations who deliver incredible work to support those in need.
“Our new name and identity, Luton Rising, is an inspiring and appropriate name for this mission.”
Luton Rising’s CEO, Graham Olver, said: “We are changing our name at an important and exciting point, as we prepare to consult early in the new year on our proposed expansion of the airport.
“Our community ownership means we have values and a mission that sets us apart. One example of this is our approach to the environment. As owners of an airport, we are fully aware of our environmental impact: particularly carbon emissions, noise, traffic and air pollution.
“We believe our sustainability measures will be some of the most far-reaching commitments to minimise environmental impacts, ever put forward by a UK airport. And we aim to go further, pro-actively supporting the council’s target for Luton to be carbon neutral by 2040.
Cllr Hazel Simmons, Leader of Luton Council, said: “Our ownership of London Luton Airport helps ensure thousands of positive life changing interventions can be made each year by the amazing charities and front line services the company funds.
“The new name and strapline much better explain what the company does and why it exists. For us it’s not about planes in the sky, it’s about creating exciting new opportunities for future generations and helping Luton become a town that truly thrives.”
For more information about the company visit lutonrising.org.uk
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 21 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 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.”