TEES Valley Mayor Ben Houchen says a £10m bail-out for Teesside Airport is “significantly smaller” than the financial support provided to other regional airports.

Mr Houchen suggested the sum was the “hole created” by the coronavirus outbreak which grounded planes and hit commercial revenues at the airport.

The cash was requested by the Conservative mayor as part of a rejig of the Tees Valley Combined Authority’s (TVCA) investment plan.

TVCA spent more than £40m buying the loss-making airport in 2019 following a previous election pledge by Mr Houchen to take it back from previous owner Peel.

It has also provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure, which has helped pay for a revamp of the airport terminal along with new passenger lounges, bars and restaurants.

Stockton North MP Alex Cunningham has labelled the continued public investment in the airport as a “vanity project” of Mr Houchen’s and suggested many Tees Valley residents could not afford to fly abroad in order to take a foreign holiday.

Mr Houchen told a meeting of TVCA’s cabinet that there was a “lot of misinformation out there at the moment” in terms of the position of the airport, which is subject to a ten year ‘turnaround’ plan previously agreed by local council leaders as part of the deal to buy it.

He said: “Other airports have suffered significantly more than Teesside Airport has.

“When we bought Teesside Airport it was in a very sorry state as a result of Peel running it into the ground and making it very difficult for the local authorities to change the direction of it.

“It was in such a state that it was very difficult for the airport to do worse.

“I get the impression that we have actually ridden covid as an airport much more effectively than other airports because the distance we had to fall was significantly lower.

“We’d rather we were profitable, but the whole purpose of the ten year plan was it was going to take time to turn it around and we are in the [upward] curve.

“To do a comparison with the Liverpool City region combined authority, who have no financial interest whatsoever in Liverpool John Lennon Airport, they have just provided a £34m bail-out, so when you compare the bail-outs that other airports have had ours is significantly smaller because of the plan we have put in place.”

Recently Luton Airport was loaned £119m by Labour-run Luton Council as a support package to help it recover from the pandemic.

Mr Houchen said: “The £10m that we need for the airport is because there is a financial loss to the airport as a result of covid – there isn’t a single airport in the country that hasn’t been affected because of covid, most disproportionately more than ourselves.

“We need this to continue to meet our ten year plan – that’s the hole it’s created in the current plan.

“Subject to the impact of covid, we do continue to be ahead of that ten year plan with the likes of Loganair, Eastern [Airways], Ryanair, and TUI starting next year hopefully.”

Middlesbrough Mayor Andy Preston, a member of Mr Houchen’s cabinet, claimed the £10m was a “relatively small amount”.

He said: “Around the country there have been far bigger bail-outs of all kinds of businesses.

“This is a fantastic asset, a business with a future, and in the great scheme of things this is a very small financial support for our strongest asset as a region.”

Teesside Airport is governed financially by the combined authority via a limited company, Goosepool, a subsidiary of TVCA.

The company Stobart Aviation, which operates Teesside Airport, has a 25% shareholding in Goosepool.

The Local Democracy Reporting Service revealed last November that the airport – which has also received a £471,000 grant from the Government to cover the cost of its business rates – had made a £2.6m loss.

Speaking in August last year, Mr Houchen said the airport would continue to lose money for a “few years to come”, but predicted it could start to move into profit in year six or seven of the ten year plan.

He said: “People know this isn’t going to be the biggest airport in the North of England in the next 12 months, but they can see the direction of travel.

“They believe in the airport and they want to use it.”

 

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