As part of the concession agreement extension, LLAOL agreed to invest money for airport expansion. They have paid for the capacity to be increased from 12 million to 18 million passengers. The original concessionaire paid for the new terminal to be built back in I think 1999. As LLAOL don't own the asset they have spent as little as possible on the upgrade. It's a bit like someone renting a home. The house is often easy to spot as it normally need decorating but the renter won't spend the money doing it up.
The problem with LLAL, or should I say the Council investing in future earnings is that all of the money they are spending is connected with airport expansion. If the Government turns down the Development Consent Order application, which has been delayed by a year, all the money spent has been wasted, as there will be no return on the investment. LLAL was set up as a zero risk company but now it will have close to half a billion pounds worth of debt by next year. LLAL can't pay its debts so has gone to its banker for a bail out. The banker is the Council who will lend it a further £83m over the next 2 years. Much of this money will be used to pay the Council back its own money as interest payments. LLAL can't go direct to the money market as another lender will have claim to the airport if LLAL can't pay them either.
The real losers are the town ratepayers. They have lost the airports dividend, which would have been lost anyway even with no airport debt but the situation is much worse as they are having to bail out the airport due to its massive debt. Also another £18m is needed for the Dart due to an overspend and the Development Consent Order needs more money thrown at it after the legal case at Heathrow over the 3rd runway.
Meanwhile every part of Council spending is being cut back apart from the airport, which is seeing a massive increase. The Council are even introducing an airport stealth tax on is residents who will now have to pay more if they want all their bins empty.
The Council tell the towns people as little as possible, which is why they want to hold airport funding meetings in secret and why they never publish LLAL minutes.
Last edited by LTNman; 20th Aug 2020 at 17:13.