City Council to consider pulling out of airport investment

Liverpool City Council is considering declining a funding call from Liverpool John Lennon Airport (LJLA), following criticism from environmentalists.

If it opts not to participate in the cash call, as part of the airport’s £100m investment plans, its shareholding in the airport company will be diluted from 10% to 5.6%.

Liverpool John Lennon Airport’s £100m masterplan – including the expansion of the terminal building and extension of the runway – was given the green light in 2018. It is targeting an increase in annual passenger numbers from five million to 7.8 million by 2030.

But, in 2019, the council declared a climate emergency, and in a full council meeting in January this year Green councillor, Anna Key, put forward a motion to remove financial aid to the airport.

She said: “You cannot move to a net-zero economy by 2030 and expand the airport – that cannot happen.”

Liverpool climate change and environment select committee chair Cllr Lena Simic said: “Let’s be clear, nobody wants airport expansion.”

The meeting backed a motion to explore the processes for removing the financial support the council provides to Liverpool John Lennon Airport.

And the consensus at a dedicated follow up meeting in February was to decline further financial support, on the grounds of budget constraints, risk, and investment not being in line with council strategy.

In 2015 the council backed the airport by investing £2m for a 20% shareholding, with majority owner Peel taking the remaining 80% for £8m.

The airport’s value subsequently increased, to the extent that, in 2019, the council sold half its 20% stake to infrastructure investor, Ancala, for a huge return worth £10.2m.

Peel Group and Ancala Partners now own 45% each.

Now, the airport’s latest call on shareholders is for investment to fund two new projects – the creation of a solar farm, and the acquisition and upgrade of a fuel farm operated by oil giant Shell.

But a report set to go before the council’s cabinet next Friday is recommending it does not participate in the funding call.

While it is estimated the authority would save about £700,000 by declining to participate, dilution of its shareholding would lead to a reduction in the value of its stake.

The airport currently contributes £250m to the Liverpool economy each year, but LJLA claims this could rise to £625m if the expansion goes ahead.

Liverpool John Lennon Airport declined to comment.