In 2019 London Heathrow airport handled a record 80.8 million passengers, to rank itself 7th in the world of airports with international and domestic traffic. It made for its owners Heathrow Airport Holdings Ltd a handsome return on those figures, and all was looking good for even better returns in 2020 until Covid-19 floated into town. Now Heathrow is struggling with the rest of airports in the world to somehow cover its losses without undue extra funding from those owners.
London Heathrow has decided it should recover its costs incurred by increasing charges and fees to its airline operators. It would like to increase those fees by £1.7 billion. The airline watchdog for the UK, the Civil Aviation Authority (CAA), has rejected that plea by saying: “Heathrow’s request sets out a solution which would involve consumers bearing a significant proportion of the costs associated with the pandemic, and providing additional protection for the shareholder, who should be supplying that funding”.
The aviation regulators liken the situation to the collapse of Railtrack in 2001. If there is no intervention by its shareholders, then it raises the possibility of renationalising the airport to ensure its future.
The shareholders of London Heathrow are not small fry concerns; the largest is Ferrovial, a Spanish global infrastructure company, and there are then substantial holdings by the Qatar Investment Authority, GIC, and the China Investment Corporation. These are all instruments of national government, GIC being Singapore. These organisations therefore have access to vast wealth funds, but are hesitant to pay out their own money, when there may be a chance they can get it from the end user of their airport instead.
Compare the attitude of the owners of Heathrow airport, to that of the owners of Luton Airport, Luton Borough Council. They see no problem with continuing to borrow money to spend on their airport expansion plans. Previous articles here have detailed those sums and what they’ll be speculated on. This is because – rather than rich shareholders to account to – only the residents of Luton will suffer the cuts that borrowing brings, and as it is all being done on their behalf, they should swallow those cuts and be grateful as tomorrow (or by 2040), there will be jam for tea and no one in Luton will be in poverty.
London Heathrow is just one example of how airport owners around the UK and the world are having to rethink how they operate now, never mind in the future, whenever that may be. Airport owners are stopping all expenditure that is not absolutely essential, even when they have cash resources to spare. This poses a very serious question: why are Luton Borough Council continuing their blinkered sprint to the financial abyss?
And just who within the Council, or its airport company LLAL, is actually monitoring the global situation?
And what is the point that has to be reached before the scales fall from their eyes on all the wasting of ratepayers’ money, and sanity prevails and all projects and expenditure are stopped?
We believe that point was many months ago, but there is of course still time to bandage the haemorrhaging wound and stop any more bleeding of money down the debt plughole, and give the patient, Luton, a chance to heal itself in time.
Save the patient, stop the cash blood drain
Stop Luton Airport Expansion