Catalan developer Abertis, the operator of Luton Airport, and the local council seem to have reached a middle ground on expanding the airport’s capacity after a fractious row erupted earlier this year.
In a recent statement, Luton council said it had agreed with Abertis on a merger of their respective expansion plans for the airport. As a result, Abertis will be given a three-year extension on its original concession agreement and will continue to manage and operate the airport until 2031, the council added.
The council did not specify what the merger would imply beyond stating that “the main elements from both [expansion] proposals are retained” and “the increase in capacity at the airport will take place within the existing boundary and use the existing runway”.
Robin Harris, the head of the local company that owns Luton Airport, said “this is a key milestone to our journey, but there remains much to be done to finalise our commercial terms”.
Earlier this year, Abertis and the Luton authorities had a very public disagreement on how to expand Luton Airport, with the council airing the possibility of breaking Abertis’ concession agreement.
The row emerged over Luton’s plans to double the airport’s capacity to 18 million passengers a year through a series of optimisations to the airport’s existing infrastructure. A doubling of Luton Airport’s capacity would make it bigger than Stansted and Manchester airports.
But Abertis did not see the plan as realistic, given that it had only 16 years left on its original 2028 lease to make a return on what it saw as a major investment to expand the airport.
This led a Luton council official, Steve Heappey, to tell The Times the council would consider breaking the concession agreement, if needed. Abertis responded by threatening the council with a termination payment that could cost it hundreds of millions of pounds.
Abertis, which has run the airport since 1998, has been responsible for trebling the number of passengers at Luton from 3.4 million at the start of the concession to 10 million today, it said in an earlier statement. Abertis added that Luton was “the fastest growing London airport in 2011” and the UK’s fifth-largest airport.