Birmingham Airport to receive £ 18.5million loan
Birmingham Airport will receive an emergency loan worth up to £ 18.5million from city council as the travel industry continues to suffer from the coronavirus lockdown.
The local authority accepted financial support following what it called the most serious slowdown in the airport’s history.
The seven West Midlands County councils own 49 percent of the airport’s shares, an additional 48.25 percent is owned by the Ontario Teachers’ Pension Plan and the remaining 2.75 percent is owned by a employee trust.
Passenger volumes between April and December fell 91%, according to the airport.
The Birmingham City Council Cabinet approved his contribution at its meeting this week, but opposition councilors have expressed concerns that more funding may be needed later.
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The meeting learned that the seven West Midlands councils have been approached to make a contribution along with three others and that the pension scheme has agreed to do so as well.
Cllr Meirion Jenkins (Con) said: “I see that we have to provide a loan to maintain liquidity and we may not have a choice about it because if we don’t and they become insolvent, we could lose more.
“How many analyzes have we done to find out if this will be enough?
“Whatever we think about the covid and the way it’s been managed and the strategy, I think one thing we can maybe all agree on is that it took us all a little bit by surprise. in terms of duration and severity that hit the UK.
“Right now, looking at the outlook for air travel, I really don’t know what the future holds. If we invest this money, how confident are we that we won’t need to do more? “
“Because the impact on tourist and business travel could be worse than we think.”
In response, Birmingham City Council chief Cllr Ian Ward said: “The risk here if we don’t make this loan and ensure airport liquidity is that we will lose control of the airport as seven metropolitan authorities.
“I think it is in the best interests of all authorities in the West Midlands and the people of the West Midlands that we continue to have an influence on the airport.
“We would not like to see anything happen at the airport that is detrimental to the economy and it is a major contributor to the economy.
“The airport itself has taken a conservative approach to returning flight numbers, so I think we can be reasonably confident that’s a number we won’t have to revisit.
“That said, we don’t know for sure what will happen with the pandemic, so there is always a possibility that this amount of money may not be enough. But we have followed all expert advice on this matter. “
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Birmingham Airport said in a statement: “The pandemic has caused the most severe slowdown in its history for Birmingham Airport, with passenger volumes from April to December of last year causing a drop in 91%.
“To limit the impact of a significant reduction in the number of passengers, the airport has taken a series of measures to preserve cash flow and manage costs, including limiting expenses, suspending capital projects and maximizing use of the job retention program.
“These actions were designed to protect the long-term interests of the airport and ensure that it is well positioned to respond to the recovery when passengers return to the plane.
“Any support is very welcome as the airport faces the continued impact of covid-19 and is rebuilding itself after the pandemic to support the region’s economic recovery and air travel needs.”