With Luton Airport struggling in wake of pandemic, is expansion still viable?
PUBLISHED: 09:01 25 May 2020 | UPDATED: 10:54 26 May 2020
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The coronavirus has hit the aviation industry hard, so what does this mean for the Luton Airport expansion?
Luton Borough Council has recently asked central government for a £50 million emergency revenue fund, as it anticipates a loss in airport revenues of around £45 million in 2020/2021 as a result of the coronavirus.
This, combined with the enforced changes made to the way people work – as a result of the coronavirus – begs the question, is the proposed expansion to add a second terminal appropriate or viable?
Labour High Town councillor Andy Malcolm has said: “COVID-19 is, and will continue to, decimate airport passenger numbers with the operator currently forecasting a reduction of at least two thirds in 2020/21.
“Our current estimates suggest an income loss of around £45m for London Luton Airport Limited (LLAL).
“This will remove the ability to pay a dividend over the next two years.
“When taking into account the expected reduction in business rates, council tax, rents, fees and charges, this will result in a shortfall of about £49m in the council’s budget for 2020/21.”
London Luton Airport Ltd, which owns Luton Airport, ran a statutory consultation between October 16, 2019, and December 16, 2019 for Hertfordshire residents – and surrounding counties – living under the flight path.
Following this, the company was expected to submit a Development Consent Order application to the planning inspectorate next month, however it has now been postponed as a result of the virus.
It said on its website: “The COVID-19 pandemic is having a major impact on the aviation industry.
“Our focus during these unprecedented times is firmly upon supporting staff and all our partners across London Luton Airport, and preparing for a period of recovery.
“Following our statutory consultation during the autumn, we’re considering very closely and seriously the feedback we received, as we continue to prepare for a Development Consent Order application.”
As businesses are forced to take to video chat platforms such as Zoom, the business trip abroad is arguably set to become a thing of the past, even when the skies reopen.
This, along with other difficulties faced by the industry, has prompted campaigners against the expansion to question its viability.
Speaking for residents’ group LADACAN, which fights to reduce airport noise and environmental impact, Andrew Lambourne said: “Despite the current expansion project not having delivered the noise reductions promised, and hence breaking its planning conditions, Luton Airport owners led by Robin Porter – Luton Borough Council CEO – pressed ahead last year with a proposed Development Consent Order to double the capacity yet again.
“This has already cost the people of Luton £40m which is sorely needed now just to make ends meet as a result of the COVID crisis – so he’s asking for a government bailout of £50m.
“This already risky project, originally estimated to required £4 billion investment, now looks untenable given the likely contraction in aviation as people realise not only it’s one of the biggest contributors to carbon emissions, but also that practising social distancing in an airport, and on a plane in close proximity to others, is extremely difficult.
“We’re calling on Luton Airport to focus on being a better airport – showing how environmental impacts can be reduced over time rather than increased – rather than always trying to be a bigger airport.”
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Councillor Annie Brewster, Harpenden Rural County Councillor and vice chairman of the Luton Airport consultative committee, said: “Whilst, clearly, I support economic growth, the pre-COVID-19 idea to double airport passengers numbers was already excessive with absolutely no mitigation offered to the Hertfordshire communities already negatively affected on our roads, on our trains and noisy very low altitude flying above our heads.
“There now needs to be a complete government rethink about UK aviation so I would be deeply shocked and disappointed if the planning application is still submitted to grow the airport.”
In response to concerns which have been heightened by the coronvirus outbreak, Luton Airport and Luton Borough Council have acknowledged the difficulties aviation faces, but said the country’s airports will play a role in getting the economy back on its feet.
A Luton Airport spokesman told this newspaper: “London Luton Airport is a key driver for the economy in Beds, Herts and Bucks and like all airports, it will play a pivotal role in getting the country back up and running once the outbreak is finally contained.
“We continue to adapt to the changing situation, remaining open for those with an essential need to travel.
“Our cargo operation is also enabling the delivery of vital supplies including medical equipment for the NHS, while our mid-term car park is being used as COVID-19 testing centre as part of the government’s UK-wide programme to control the spread of coronavirus.
“With the right level of support from the government LLA will be at the heart of region’s revival, playing it’s part in ensuring that the UK emerges on the other side of the crisis stronger than before.”
Graham Olver, chief strategy officer for Luton Council’s airport company London Luton Airport Ltd (LLAL), said: “COVID-19 has sadly impacted on every area of people’s lives and wellbeing, and the effects on aviation have been stark.
“We are an airport owner entirely focused on supporting and improving people’s lives, and driving economic and employment growth, both in Luton and neighbouring communities.
“We see it as vital that we work hard not only to support safe passenger services at Luton but also continue to plan for how prudent investment in our stewardship of the airport can continue to benefit future generations.
“This will be vital for supporting the local, regional and national recovery that will need to take place after the pandemic.
“Since our second public consultation late last year, we have been listening carefully to feedback about our proposals for long-term expansion and in particular a clear message that people want us to go even further to mitigate environmental issues, including noise, air quality and climate change.”
London Luton Airport Ltd was set to submit its application for the expansion following the public consultation in the autumn in June.
Airport bosses say they are “serious” about taking on board the views of respondents, and the airport will “take all the time it needs” to address this.
Mr Olver continued: “We have gone away to take a fresh look at every aspect of sustainability and the impacts of running an airport, and are actively considering how we can set out a path that would make London Luton one of the most sustainable as well as socially conscious airports in the UK.
“We are serious about this, and it is right that we take all the time we need at this stage. We won’t be submitting our DCO application in June as originally outlined, and we hope to have much more to say about this over the coming weeks and months.”
“Since 2013 our ongoing investment in the airport has delivered a £21m yearly increase in revenue to the council and significantly offset the need for harder cuts to vital frontline services in Luton, even after taking the financing costs of our development programmes into account.
“London Luton Airport already supports more than 27,000 jobs in Bedfordshire, Buckinghamshire and Hertfordshire. Our additional social investment in key voluntary and charitable services now exceeds £130m over the last 12 years, and the value of this has never been more clearly demonstrated than through the emergency support our airport company has been able to provide over the last few weeks to the inspiring community response to coronavirus.”
For further information about the Luton airport expansion, which would see a second terminal, go to futureluton.llal.org.uk.
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