Blackpool’s losses down to onerous Jet2 deal, says council
BLACKPOOL Council, a 5% shareholder in the town’s airport, has suggested an “extremely onerous” contract with the airline Jet2 was to blame for its imminent closure.
The airport is due to close tomorrow after majority shareholder Balfour Beatty failed to find a buyer for the business which was losing around £2m a year.
But a statement from Cllr John Jones, Blackpool Council’s cabinet member for highways and transport, said Balfour Beatty was still in talks with a, “number of parties expressing an interest with a range of proposals”.
However, it came as Balfour Beatty took steps to liquidate the operating company, Blackpool Airport Limited. A meeting of creditors and shareholders will be held on Thursday where a vote will be taken on placing the company into voluntary liquidation. Restructuring expert Gavin Gracie has already been appointed to the board.
Cllr Jones went on to say that it was “important to consider how such an apparently popular airport with busy flights has come to close”, and referred to a previous court battle between Jet2 – which was responsible for around 80% of the 240,000 passengers a year – and the airport over the terms of the airline’s 15-year contract that was agreed with former owner City Hopper in 2005.
Blackpool, acquired by Balfour Beatty in 2008, fell out with Jet2 over its flight times in 2010. The airport said the arrival and departure of flights outside the normal operating hours of 7am-9pm was creating additional costs and said it would not accept such flights after October 29, 2010. Jet2 sued for breach of contract and the judge found in its favour. The ruling was upheld at an appeal brought by the airport in 2012.
Cllr Jones said: “Jet2 has been operating profitably, while the losses at the airport have been around £2m per annum. Balfour Beatty even took Jet2 to court to try and reduce the imbalance in this relationship, but this failed.
“Furthermore, with Jet2 planning to reduce their Blackpool flight numbers further next year, it would be difficult to see how anyone would have been prepared to take on that arrangement. The contract was, in our view, an extremely onerous one with very high fixed costs for the owners and one that could not be sustained.
“Jet2 have to operate in the interests of shareholders and we understand that, but their stance has certainly not been supportive of continuing operations in Blackpool. Therefore this parting was somewhat inevitable and we want to place on record our frustration that more has not been done by Jet2, in particular, to make the airport work for all parties. We also feel more could have been done by the airport operators to try to bring in new routes and airlines.”
A spokesperson for Jet2 said: “The agreement between ourselves and the management at Blackpool Airport, was signed in 2005 and was entered into very enthusiastically by both parties. There followed several years of very successful partnership, growth and trading.
“However, when Balfour Beatty took over; the investment and drive was noticeably lacking. We are very disappointed at the final decision to close Blackpool but our main priority now is to ensure all our customers are looked after and smoothly transitioned over to nearby Manchester Airport.”
Jet2 moved its Blackpool flights to Manchester last week. City Wing, which operates flights to Blackpool from the Isle of Man and Belfast, will stop both services for four weeks while the local council and businesses discuss ways to revive the airport. Aer Lingus will also stop its Dublin to Blackpool service. The closure is affecting 110 directly employed staff.
