Local Councils asked to reject Newcastle Airport’s request for a…

local-councils-asked-to-reject-newcastle-airport’s-request-for-a…

Local Councils asked to reject Newcastle Airport’s request for a…

Local Councils asked to reject Newcastle Airport’s request for a £5.1 million loan of taxpayers’ money
2021-10-11 09:59:00
Local group, Aircraft Noise Action Group (ANAG), at Newcastle say the 7 North East Councils, which own 51% of the Airport, are being asked to prop up (by £5.1 million of taxpayers’ money) for an at-risk business which mostly enables people to take holidays and visit friends and relatives. Newcastle Airport has suffered huge financial losses as a result of Covid with revenues falling by £46 million according to its 2020 Annual Report. The airport is struggling financially – so it is asking for loan facilities to support its continued functioning. As well as the councils, the airport is asking the 49% private shareholder, AMP Capital, for a similar sum £4.9 million. Newcastle Airport claims to be a key driver of business in the North East. In practice, it is primarily a holiday and leisure facility with a small proportion of business specific travellers. Most travellers are British, taking their holiday spending money out of the country. ANAG says people need holidays, but a loan for this purpose is not an investment in the economic future of the north east. They also think it is environmentally short sighted and irresponsible and that the loan request should be rejected. .Tweet   Local Councils asked to reject Newcastle Airport’s loan request. The 7 North East Councils are being asked to prop up an at-risk business which mostly enables people to take holidays and visit friends and relatives. People need holidays but we think a loan for this purpose is not an investment in the economic future of the north east. We also think it is environmentally short sighted and irresponsible and that the loan request should be rejected. . 1. Newcastle Airport losses and financial state: Newcastle Airport has suffered huge financial losses as a result of the pandemic with revenues falling by £46 million according to its 2020 Annual Report. The Airport continues to struggle and, as reported by ITV News on 5/10/2021 ( https://tinyurl.com/s2s4h4mw ), it is asking for loan facilities to support its continued functioning. The 7 North East councils, which own 51% of the Airport, are being asked to stump up a sum we understand to be £5.1 million pounds of taxpayers money. The Airport is also asking the 49% private shareholder, AMP Capital, for a similar sum (£4.9M). Councils are already struggling to provide core statutory services with further cuts to come and potential rises in council tax. They can ill afford to risk the loss of further sums to prop up an uncertain local business, any loss could mean a further reduction in services or jobs. This loan will have to be added to existing historic, large-scale debt for which the Airport is already struggling to make payments. The major lenders have agreed to waive repayment requirements until the end of 2021 and the Airport is trying to extend this until the end of 2022 to prevent the airport breaching the existing loan covenants – this is a measure of how bad the situation is. The new loan facility will probably be used to fund the day to day running of the airport, let alone any repayments due. 2. Due diligence and investigation Due diligence should be carried out by the 7 Councils before handing over this amount of taxpayers money to support their own 51% share in the ownership of Newcastle airport. This will surely reveal that aviation is in a poor state nationally and globally and that its future is precarious. Many economies are in a volatile state of flux and this has a direct effect on the UK which is also experiencing economic damage arising from Brexit. All this will negatively impact demand across the board including aviation. If made, this would be a high ris

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