Luton Airport: Threat of 'substantial' termination cost

The operator of Luton airport is threatening to charge millions of pounds in fees if its contract is ended under expansion plans.

Luton Borough Council, which owns the airport, has revealed a blueprint aimed at making it bigger than rivals at Stansted and Manchester.

But Spanish operators Abertis say the scheme is unrealistic and proposes to publish its own expansion plans.

A council spokesman said no decision had been made and talks were under way.

Council leaders say their vision for Luton will create 6,000 jobs and double passenger numbers to 18 million a year.

However, they need a partner to help cover the expansion cost and there is a possibility they might end the current concession deal in 2014.

Abertis, which holds the concession until 2028, said the time remaining on their contract was insufficient to implement the expansion as planned and bring in a commercial return for their investment.

An Abertis spokesman said: "As London Luton Airport's operator, we have already trebled the number of passengers using the airport from 3.4 million in 1998 to 10 million today.

"Under our stewardship, London Luton Airport has become the fifth largest airport in the UK."

Abertis questioned the environmental impact of the expansion plan and said it would impose a termination payment on the council of several hundred millions of pounds if their contract was ended prematurely.

New job opportunities

Other concerns expressed by the operator included increased congestion as "only a small amount of new terminal building" was envisaged.

It also questioned the future of cargo and corporate aviation jobs in the new plan.

Abertis said: "We firmly believe further development must be based on the core considerations of safety, feasibility, sustainability and environmental sensitivity."

The council aims to achieve its expansion within the airport's current boundary and using the existing runway.

The plans will be on show at a series of public exhibitions around the region until 8 March.

Borough councillor Robin Harris said: "Through the consultation, we will work hard to ensure everyone has the maximum opportunity to understand our proposals to optimise the airport, create new job opportunities and attract business."

The council sees the budget airline and holiday flight airport's expansion as a key investment for the people of Luton.

Steve Heappey, from London Luton Airport Limited said: "We seek and welcome comments, questions and feedback on our proposal to grow London Luton Airport and the benefits that this will bring to Luton and the region.

"We will consider comments from the existing operator, alongside those of other interested parties.

"Any talk of termination compensation is both speculative and premature."