Luton Borough Council has admitted in its 2017/18 draft Statement of Accounts that a significant pressure over the next few years is the expected reduction in the level of dividend payable by London Luton Airport Ltd, due to the cost of debt financing required to expand Luton Airport. This will mean that every Luton resident will be adversely affected with either a rise in council tax or a cut in services to make up for the shortfall in airport dividends.
With no guarantees that the council will find the additional 20 million passengers needed to fill a second terminal, Luton Council could be left in a dire situation where they are forced to pay interest payments for a generation or more on an expanded airport that the airlines might not want.
The council has yet to say what the projected cost will be to build a new airport attached to the existing runway or the passenger breakeven point on a cost figure that they haven’t revealed.
This isn’t a public company risking shareholders’ money, but a local council that is strapped for cash and is already struggling to pay for council services – a council that is prepared to risk everything in the hope that there is jam tomorrow.