Luton Airport expansion plans anger operator

The operator of Luton Airport has expressed its concern over Luton Council's expansion plans for the airport and warned it will demand 'very substantial' fees if the council decides to terminate its contract early in order to push forward the proposals.

A blueprint from Luton Council-owned London Luton Airport Ltd (LLAL) proposes increasing passenger numbers from 10 million a year to 18 million a year. However it states that, in order to do so, it may need to terminate the contract of the consortium that is currently licensed to run the airport until 2028, and points to a break opportunity in April 2014.

Spanish infrastructure giant Abertis, the majority stakeholder in contract-holder London Luton Airport Operations, said it had already achieved "market leading growth" compared to other  UK airports by trebling passenger numbers from 3.4 million in 1998 to the present level.

It questioned Luton Council’s growth assumptions, ability to pay termination costs expected to run into millions of pounds, and the environmental effects of expansion on the scale proposed.

A company spokesman said: "If the council decides to terminate our concession in order to implement its proposals, it will have to make a termination payment to us reflecting the value of the remaining years of the concession and certain other liabilities. Such a payment would be very substantial.

"How would this termination payment be funded and are the council’s proposals feasible when the payment is taken into account?"

The spokesman added that Luton Council’s proposals would increase the airport’s passenger numbers beyond those of Stansted or Manchester airports, but seemed to involve "only a small amount" of new terminal buildings.

"What level of congestion and throughput during the busiest hours does the council think is acceptable to passengers?" he asked.

The LLAL consultation runs until 26 March, after which planning permision for the airprort expansion is expected to be sought from the council.

Abertis is due to publish its own expansion plans for the airport later this month.

According to LLAL, Luton Council earned £22.2 million from the airport in the 2010/11 financial year.

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