Luton Rising (LR) and Luton Borough Council (LBC) must have been assured that the legal challenge against their Airport Expansion Plans would not be declined by the last High Court, as it appears they have been rather busy for the past few months. As we find they have set up the process for the next Airport Operating Concessionaire from 2032: https://news.sky.com/story/luton-airport-sale-process-being-readied-for-take-off-13576907
LR have been holding talks with Investment Bankers to find one to oversee the process of helping them award the next long-term Operating Licence, and have chosen Cantor Fitzgerald, an American investment bank, and they plan to have the new operators signed up by the end of 2029.
The current Concessionaire is a partnership of AENA, the Spanish Government’s national airports operator and Infrabridge, a global Infrastructure Investments group. AENA have been in place since 2013, with Infrabridge, joining them in 2025.
The value of the deal to the new operators has not been publicised but would reflect LR’s proposed Expansion Plans and the broader rise in valuations of Aviation Infrastructure assets.
Let us now have a look at this in a little more detail –
Firstly, the process involved in appointing Cantor Fitzgerald will not have been a cheap one as their services will cost many millions of pounds. Meanwhile, LR hasn’t paid a Dividend on the Concession Fee to Luton Services’ Budgets since 2018/19 and admitted that they cannot legally do so, under Financial regulations in the UK, in a public meeting earlier this year. They do not have sufficient funds to do so.
So where has the money come from to pay for this?
LR have stated that the Expansion will only be by Private Investment and will be paid for by whoever this new Concessionaire is
But the process of appointing Cantor Fitzgerald, is not part of that Expansion. So, it has been financed from the Airport Concession Fee income, or – more worryingly – from another debt stream from LBC.
LR already has a debt line of £507.1 million from LBC.
£16.9 million is due for payment in March 2028, £11 million in April 2031, and the final £479.2 million in December 2032.
With this amount of debt, plus interest of course, the total is probably nearer £600 million. It would come as no surprise if LBC simply added another couple of hundred million to that total and then kept it quiet from the public, whilst claiming at every opportunity, that they have no money to spend in the town.
The deal will reflect the Airport value, the Expansion plans, and the value of airports in general. For since 2018/19, every set of Yearly Accounts for LR and LBC, have included a Qualified Opinion Statement from their auditors. To date there have been four different Audit companies involved. The reason for those opinions is the value put on the Airport by LR/LBC.
LR/LBC have the deluded opinion, created by previous Council Officers and Councillors, that it is a key globally-significant airport and therefore is a “glittering prize” for investors.
But the reality is, that it is a physically small Regional Airport, with a non-extendable 7,000-foot runway, on top of a hill, dominated by three low-cost airlines, a UK holiday airline, and two executive fixed-base operations. The “bottom line” starting points from LR/LBC for the new Concessionaire, will be to pay off the total amount of all the debts mentioned above, to guarantee a minimum £50 million Concession fee, AND to fund all Expansion Plans, which stood at £3.5 Billion during the Planning Inquiry.
Who could resist??
We refer you back to a comment we have reported on before, that the Airport Expansion will all be funded by private investment.
The process of looking for a new concessionaire suggests to us that AENA will not be investing any more cash into Expansion, as there will not be enough time to recoup it. Unless they leave the Concession early, we cannot see how any Expansion can start before 2033. If they do leave early, as with all contracts, there will be severance clauses, which LR will have to find, once again, with cash that could have been spent in Luton. Or perhaps it will be added to the bill for the next Concessionaire?
If AENA do stay till the end, we assume that the new Concessionaire appointment date of December 2029, would mean that the three-year gap, would be spent developing the full Expansion Plans for start in 2033.
2033 is a long way away, and between now and then, LBC will have two local elections, 2027 and 2031, and who knows, Luton might end up with a proper Local Authority, and some sanity might be restored.
Luton Airport Expansion, is still a long way off, if at all?