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Luton ready for summer rush

AIRPORTS: Luton finds the cash to grow.

If you were at Luton airport at the height of the holiday season last summer you might well have thought it needed some investment. At peak times travellers waiting to check in were held outside the terminal building. The UK's fastest growing airport was bulging at the seams.

The future looks considerably brighter. Later this year, travellers will find the check-in desks located on the ground floor of a Norman Foster designed building which, even before it opens, has seen Luton listed alongside Foster's Chek Lap Kok and Renzo Piano's Osaka as a destinational airport in the glossiest of American magazines.

And for the future there is a promise of an even bigger terminal that will allow Luton to handle 10M passengers a year - double the number it will be able to process this year.

The new terminal and associated aircraft stands cost £95M, while planned new developments will add up to another £100M. Such major investment has been made possible thanks to the decision of Luton Borough Council to hand over operation and expansion of the airport to a private consortium for 30 years.

The three members of the consortium are Airports Group International, Barclays Private Equity and Bechtel.

Luton has owned the airport since the late-Thirties. In 1986 LBC set up a wholly owned company which was responsible for the running of the facility. This operated as an independent organisation but with a significant number of council members on its board of directors.

The company made small profits, says Luton's finance director, Peter Watson, which it was allowed to reinvest. A control tower was built and there was a modest growth in facilities.

In 1991 the airport was on the verge of being sold, but a change of control at the council saw the decision reversed. The airport was regarded by the controlling Labour group as a valuable asset which should be retained. And most importantly, it was a major employer in an area which had seen more than its fair share of job losses.

The council wished to see more jobs rather than less and if the airport passed into private hands there would be no guarantee of that.

The wisdom of the decision not to sell became clear as traffic through Luton expanded with the arrival of independent 'no-frills' carriers such as EasyJet and Debonair. Expansion became vital and with the council unable to borrow the sort of money needed, other avenues had to be investigated.

The decision to look for a private sector consortium to take on the airport was uncharted territory for the local authority. But with the backing of DETR Luton searched for interested parties.

In the event there were 57 expressions of interest which were whittled down to three serious contenders with AGI, BPF and Bechtel winning the day last August. The key to their success was a commitment to preserve jobs and develop the airport even more.

The consortium took over responsibility for completion of the new terminal and associated works which had started in anticipation of the deal, but before it was signed.

There seems to be no doubt at Bechtel's Hammersmith headquarters that the handover date of the terminal at the end of June will be kept to, in time for the summer holiday rush. If this does not happen, or should construction problems arise at a later date, Bechtel International Enterprises will not have far to go to discuss the matter with project manager, Bechtel Ltd.

The council says it is very happy with the new arrangement. More than 300 jobs have been created since last August, and LBC is receiving a regular fee income based on the number of landings and departures and cargo loads. This must come as something of a relief, since when the idea of a concession was initially mooted, there was some doubt at LBC about who paid whom.

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