LUTON Council has agreed a £119 million financial support package for the company that operates London Luton Airport as it begins its recovery from the effects of the pandemic.
At a meeting last night (Monday), councillors on the Executive heard how the future prosperity of the town for generations to come was at stake unless action was taken.
They agreed an investment totalling £119 million, plus a contingency of £20 million, to help to stabilise the airport company following the pandemic and to provide additional capital investment.
A council statement said the sums are repayable, will come at no net cost to the Luton taxpayer and will have no negative impact on council tax, services or the council’s reserves.
The money is being borrowed by the council on behalf of London Luton Airport Limited and is not money it could otherwise use to fund regular services.
The council believes that there is confidence that demand for aviation will return as people are able once again to visit their friends and families living abroad and to take holidays. The loans can be settled from future airport revenues, it says.
Cllr Andy Malcolm, portfolio holder for finance at Luton Council, said: “We had no choice but to hear the item about financial support to LLAL in private during the Executive meeting because of commercial sensitivities. There are many jobs at stake here.
“But I am keen that the people of Luton understand what has been agreed and why because these are large sums of money.
“Coronavirus has very sadly had devastating impacts on communities across the world, and Luton is no different. It is our duty as councillors to ensure our town recovers in the best way possible.”
London Luton Airport has provided financial support for frontline services, countless partners in the community and the charity sector over the past 20 years, he added. Agreeing these funds will ensure that is the case for the next 20 years and beyond.
“Throughout this process I have been very conscious of how history will view the decisions we are making today, how future generations will feel we reacted to this challenge.
“Without agreeing these loans, the council would be left with little choice but to sell its most valuable asset at a time when it could achieve a fair – let alone optimum – price.”
Airlines and other UK airports, including Heathrow, Gatwick and Manchester, are facing similar financial problems and have increased borrowing significantly.
“We are absolutely not alone in facing this challenge,” said Cllr Malcolm.
Agreeing this package means the airport can continue to support services and people in need in Luton for years to come, said a council spokesman.
