Airport, Community,

London Luton Airport: new joint investment package charts path to sustainable post-Covid recovery

The owner and the operator of London Luton Airport have announced a new joint investment package to support the airport’s sustainable recovery following the severe impacts of the pandemic.

The agreement aims to provide certainty for the thousands who rely on the airport for employment and the many local and regional businesses in the supply chain, and has further been approved by Luton Council within the terms of the existing stabilisation package – previously agreed and widely reported in summer 2021. As was stated at the time, the package of loans to support Luton Rising – the council’s company that owns the airport – will come at no direct cost to the Luton taxpayer.

Under a wide-ranging agreement, which deals with the impact of fewer passengers and loss of income at the airport since March 2020, the operator (London Luton Airport Operations Ltd, LLAOL) will retain £45m over a three-year period from past and future passenger income that would have been due to Luton Rising had passenger numbers not reduced.

As part of the airport’s recovery, LLAOL has committed to a number of future activities supporting positive actions on the airport’s social and environmental impacts. These include delivering the real living wage for all its direct employees during 2022, and the reintroduction of a dedicated taxi rank for local Hackney Carriage drivers.

Operator jobs at the airport will be advertised alongside Luton Council vacancies, ensuring local jobs are targeted at local people. LLAOL and Luton Rising are also working closely on ambitious sustainability and net zero strategies; directly supporting Luton Council’s 2040 vision for a place to thrive and a carbon neutral town where no-one needs to live in poverty.

The term of the operating concession will be extended up to December 2032, with a focus on stronger partnership working for the airport’s future.

The deal concludes contractual discussions between the two parties on sharing the financial impact of Covid-19.

Graham Olver, CEO of Luton Rising, said: “Under our unique concession agreement, Luton Rising and LLAOL have together delivered unprecedented success for our airport. In the period from 2010-18 alone passenger volumes more than doubled to 18mppa, and this has enabled Luton Rising to provide an incredible £440m since 1998 to support front-line and community services in Luton.

“This agreement sets out how we will continue to work together over the coming decade to build back better, stronger and greener, and support the vital economic and employment recovery that we will want to see in the supply chain and across the region.

“Importantly for Luton residents, this has also been achieved with no direct impact on council tax, and continues to protect the vital investment we make every year in voluntary and community services to improve people’s lives.”

In 2019 London Luton Airport served almost 18 million passengers, supported 27,000 jobs in the regional economy – including 10,000 in Luton – and delivered £1.8bn economic activity for UK GDP.

Alberto Martin, CEO of LLAOL, said: “The pandemic has been the biggest crisis in aviation history, wiping out 20 years of passenger growth almost overnight. As the sector begins to recover, this deal, in partnership with the airport owner, enables us to prepare for future success and creates reassurance for the thousands of people and the many local businesses who rely on us through the supply chain.”