All is not well for the owner of the airport (LLAL / Luton Borough Council) as the accounts from April 1st 2019 to March 31st 2020 have still not been published and are shown as being overdue. The accounts will show record growth of 17.5m passengers and should show record income but the annual report and financial statement will have been written during the pandemic so what will the PW accountants be saying for future prospects regarding the company’s ability to continue as a going concern?
LLAL has no financial relationship with any bank or finance house with all debenture loans to LLAL coming from the Council, who in turn has had to be bailed out by the Government, as it is the worst performing Council in the UK.
On the other hand the airport operator (LLAOL) has already produced its annual report and financial statement but this time for the period 1st January 2020 to 31st December 2020 which makes for an interesting read.
While shareholders of LLAOL have committed to £13m of additional liquidity the Council has had to pump in an additional £68m to stop its own airport company going bankrupt so why would this be when it has no staff?
Despite passenger figures of 5.5m for 2020, since April 1st the airport operator has refused to pay any concession fees to the airport owner claiming Force Majeure, which the Council disputes. Fees are paid quarterly and in arrears. This has reduced the airport operators losses to just £13.5m on a turnover of £91.2m despite Covid. This has still allowed a dividend to be paid to its Spanish and Australian shareholders of £5m compared to £16.7m for 2019.
As for LLAL and the Council, they are left with no income while having to find the money for the Dart and are committed to pumping in an additional £168m over the next 5 years to cover mainly debts and bills. Council accounts have stated there will be no dividends from LLAL for at least the next 5 years and that is assuming they will still be the owners of LLAL after next year.
While it has been claimed the airport has been subsidising the residents of Luton it is still an uncomfortable fact that Luton has a band D tax bill that is higher than the national average despite the airport. For the last financial year the Council has borrowed £22m, which has been passed on to LLAL so LLAL can add it to their debts and that has allowed them to pay the £22m back to the Council to be used as Council income. So is that the plan for the next 5 years? Sounds like a form of ponzi scheme to me with the Council scamming itself or will the Council taxpayers be picking up the final bill?
Last edited by LTNman; 18th Apr 2021 at 09:45.