DCO Update, July 2021

On the 19th July we attended the summer meeting of the London Luton Airport Consultative Committee.

The airport operating company spoke again of the challenges they are facing on a daily basis, with the passenger throughput for April-June being still down at only 11% of the 2019 figures. The company’s forecasting team is having great trouble, as the passenger load figures will be high on flights one week, then plummet the next, making any calculations on forward strategies and when they might see a sustained return, all but impossible. Any reputable commercial company can, and should, only base its forward projections on the known data it actually has.

Compare this then to the presentation by the airport owner, London Luton Airport Ltd (LLAL), a private company funded by their owner, Luton Borough Council. 

A senior management officer informed the Committee that the DCO process had to be rewritten because of

  • Brexit
  • The Climate Emergency
  • The UK Government’s Airports National Policy Statement
  • COVID-19

They had taken the opportunity through “value engineering options” to take £1 billion pounds off the construction costs of the project.

The plans were now encompassing greener growth/management options, better surface access planning, and a bigger direction to long-term well-paid employment/skills growth opportunities.

These new plans were now scheduled for a Statutory Public Consultation phase in the spring of next year, with a submission date of the following summer. These Consultations would be primarily of an online digital nature, with a limited number of public events.  

The expansion was now split into three phases:-         

  • Phase 1 – This will be achieved by alterations to the current facilities, to bring a throughput of 21.5 million passengers per annum (MPPA), which was forecast to be reached between 2029-2031.
  • Phase 2 – This will see the modular development of the Terminal 2 site, increasing throughput to 27 MPPA , forecast for 2033-2037.  
  • Phase 3 – Dependant on demand this would be more modular additions to T2, taking capacity to 32 MPPA, forecast for 2040-2045.

This presentation brought the obvious question from one of our fellow committee members (though we were all no doubt thinking the same):-

How can LLAL be pursuing all these expensive plans, when they have had to borrow another £139 million from LBC to stabilise the company this year, and their debts have made the sale of the airport a distinct possibility?      

The LLAL officer assured everyone that all was stable now and going forward, and these plans were within budgets. This is of course very good news for anyone reading this who is a resident of Luton, as it means LLAL will need no new bailouts from LBC, though – as we’ve said in the past – we won’t hold our breath on that one.

Once again this meeting highlights the reasons why LLAL and LBC find themselves in such a financial pickle.  The multi-national vastly-experienced airport operator realises the problems it is facing, and has cut its cloth accordingly, to protect its staff and budgets going forwards into the unknown months/years ahead.  

But the vastly-inexperienced single-airport owner has strapped on its blinkers and is ploughing on regardless, ignoring current data and trends both nationally and internationally, from climate change to Covid-19. 

Then again, when it is someone else providing all the cash, you don’t have to answer to any shareholders, and you’ll never have to be held accountable for the huge sums you spend, why would you have any concerns?  

Enter the real world – Stop Luton Airport Expansion Now          

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