19 Million passengers a Year – But when and how?

After two evenings of articulate, passionate objection speeches, and a raft of not-quite-accurate but unchallenged applicant waffle, the owners of Luton Airport approved a planning application for more noise, more pollution, more road traffic, and more aircraft movements. The application to reward the abuse of previous planning conditions was passed by seven Red hands to 2 Yellow ones.

Avarice and obligation to the public, and indeed the planet, was ignored for commercial gain but we expected nothing less.  There are many bones of contention on this decision, but we would like to offer comment on just two.

The first is conflict of interest. When challenged on this by objectors on the first evening that Luton Borough Council (LBC), as owner of the airport, stood to gain financially from an approval, there appeared to be some confusion on that issue.   So much so that on the second evening, at great expense to LBC, a Queen’s Counsel was paid to represent the Council’s interests and give his opinion that there was no conflict.  This was done in full knowledge that opposition groups had no Queen’s Counsel to represent them. Ethically and morally of course, we would suggest that conflict was clearly evident after the Chairwoman of the airport made a public statement that the Planning Committee Members were also the owners of the airport.

The next issue is, how will growth to 19 million passengers be achieved?  

The sole reason that the 18 million passenger cap was reached years ahead of plan, was because LBC authorised London Luton Airport Ltd (AKA Luton Rising or LR), to withhold public income from the concession fee in 2015.  The airport operator then used that money to artificially stimulate growth by granting rebates on charges to wealthy airlines. Those inducements supposedly ended in March 2020.

The question now is: will the low-cost airlines, who are the only users of Luton Airport, be prepared to put passengers back through the airport without new financial inducements?  The yield returns with these discounts were attractive, so will paying full price and cutting that yield be as attractive?  Unlike in 2015, the other London area airports are no longer full.  Gatwick in particular, has space and slots to fill, so what happens if they make the Luton operators a better offer? 

Out of the airport operator and the owner, who will take a hit on their returns to keep traffic at Luton? The airport operator was straight out of the blocks when Covid first hit by invoking force majeure costs on LR to the tune of £45 million over the next three years, as we informed you recently.  Please don’t be confused by the “we are saving jobs” smokescreen put out by LR on the subject, these are force majeure costs pure and simple.  

LR has therefore no income to give back to the operator, if it still wants to keep up with its debt repayments, and ongoing costs on the DCO application and the over running DART project.  

Unless of course we have another behind-closed-doors loan from LBC to LR?

Earlier this year LBC did just that when it sanctioned a four-year, £1 billion capitalisation plan for LR and its projects.  We think LBC/LR will not hesitate to syphon off some of this cash for yet another inducement programme.

Rest assured, we at SLAE and the other groups opposed to the fanciful expansion nonsense, will be watching LBC very closely indeed

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