A NORTH-EAST airport is to appeal after losing a court action seeking £12m damages against budget airline bmibaby after it withdrew its services.

In the High Court yesterday, Durham Tees Valley Airport (DTVA) blamed bmibaby for shattering losses it suffered after the airline axed its flights in 2006.

Now the airport – ordered to pay costs of up to £1m – has vowed to take its case to the Court of Appeal.

Yesterday, Mr Justice Davis ruled “with some reluctance”

that although a contract existed obliging the airline to operate two aircraft from DTVA until April 2014, the terms were too vague to be enforceable.

DTVA’s legal team argued the airline breached an April 2003 contract, which said it must fly two of its planes from the airport for at least ten years.

Mark Brealey QC said the deal was requested by bmibaby and backed by funding guarantees from the airport and the local authorities.

The five councils – Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton – still retain a minority interest after selling their 75 per cent stake to Manchester- based Peel in 2003.

The airline was even granted its controversial wish to change the airport’s name from Teesside International Airport for marketing reasons and a second contract was signed in 2005 after the court heard that the airport had further problems persuading bmibaby to meet its contractual obligations.

However, the airline continued to make heavy losses at DTVA, forecasting it would lose £3.2m in 2006 and £2.5m in 2007, the court was told.

Bmibaby said it was entitled to fulfil the minimum performance of its contractual obligations.

It added that DTVA’s claim the airline’s withdrawal would result in a future loss of £11.5m was exaggerated.

Mr Justice Davis told the court the parties entered into written agreements, which were clearly intended to have legal effect.

“It seems to me that throughout, bmibaby has adopted a very hard-headed attitude, although I suppose that in the commercial world it is in order to consult solely one’s own interests without over much concern for the other side’s,” he said.

“But, be that as it may, I have decided that it is not legally permissable to imply into the contractual arrangements a term of the kind advanced by the claimant.”

Outside the court, Tim Bye, bmi deputy chief executive, said: “We were always confident that we had a strong case and we can hopefully now put the matter behind us. The judge has instructed that the majority of the costs be paid by DTVA.”

Hugh Lang, group airports director for the Peel Airports Group, said: “We believe that this decision can be overturned through the Court of Appeal.”

It is anticipated that will be heard later this year.