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ACHIEVED TARGETS: Teesside Airport operator’s exit was ‘mutual’

ACHIEVED TARGETS: Teesside Airport operator’s exit was ‘mutual’

Teesside International Airport

A report has suggested the departure of Teesside Airport’s previous operator was a “mutual” decision and it had achieved previously agreed targets.

Stobart Aviation, latterly known as Esken, had a 25% share in Goosepool Limited, the private company established by the Tees Valley Combined Authority to take control of the airport.

It was tasked with providing so-called ‘back office’ services and aviation support and signed a four-year agreement in March 2019.

But in July this year it was announced that the agreement was being ended and Esken’s 25% was being transferred at no cost to a newly-established charitable trust, the Teesside Airport Foundation.

The pull-out was described as “disappointing” by Stockton North MP Alex Cunningham, who said Esken had pledged not just to make the airport viable, but a major airport in its own right.

A report provided for members of the combined authority’s overview and scrutiny committee said: “As the sector emerged from the covid-19 pandemic and Teesside Airport moved into the next phase of development, it was considered the right time to review the operating arrangements.

“The review concluded that the Esken agreement outputs had been delivered.

“The decision was taken to part company with Stobart/Esken, by mutual agreement, as this coincided with several other projects at [the airport] and also externally for Stobart/Esken.”

The report said Esken had provided “crucial support” and assisted with many transitional management services.

It said: “Their aviation experience and support resulted in the airport being able to build its own strong relationships with airlines and across the wider sector ahead of the original schedule.”

The report said over the past two years back office services had been brought back in-house and the airport management team had been developed, including with the appointment of Phil Forster, as managing director, who is said to have significant experience of negotiating with airlines, having also worked at Leeds/Bradford and Newcastle airports.

Over the summer it was agreed by the combined authority that a further £10m in financial support be given to the airport after revenues were badly hit by the pandemic and to enable it to keep on track with a ten-year turnaround plan.

It racked up £13.4m in losses in the 2020/21 financial year.

Despite this it is said to have made significant progress against previously set-out targets, attracting an increased mix of new scheduled, low cost and charter operators, including the likes of Ryanair, Loganair and TUI, to fly from the airport.

The airport terminal has been extensively redeveloped and an updated business plan put in place which forecasts revenues could reach £30.5m by March 2025, along with a potential return to profit within three years.

More than £40m was spent by the combined authority buying Teesside Airport following an election pledge in 2017 by Tees Valley Mayor Ben Houchen to secure it from previous owner Peel.

It has provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure.

A £34.4m loan facility has also been provided to the airport, money which can be drawn down as required over a period until March 31, 2029.

 

Words: Stuart Arnold, Local Democracy Reporter


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