Newcastle Airport faces an uncertain future, after a national newspaper revealed that the hub’s majority shareholders are desperate to sell their stake in the Woolsington hub.
Ownership of Newcastle Airport is split between two companies, namely, LA7, with 51%, and Copenhagen Airport, with 49%. The former is a consortium of seven local authorities in the northeast, including the councils of Newcastle, Gateshead, and Sunderland, while the latter is, as its name suggests, a Danish airport.
The Sunday Times claims that LA7 owes £320m on a loan taken out on behalf of the airport in 2006, a loan that, if the broadsheet is to be believed, must be repaid within the next thirty months. However, the holding company cannot afford to begin repayments, and has asked major auditing firm, KPMG, for assistance.
LA7 has refused to comment on “speculation”, but local news website, nebusiness.co.uk, intimated that the council group would not entertain “such a sale” at present. However, the news that Newcastle’s other investor, Copenhagen Airport, has already put its slice of the northeast hub up for sale, suggests that at least 49% of Newcastle Airport will change hands regardless of whether LA7 repays its £320m bill.
Macquarie Bank, an Australian company that funds Copenhagen Airport, has advised the Danish hub to ‘abandon ship’, and extricate itself from Newcastle Airport. While the bank has not revealed its motives, Copenhagen Airport’s escape could be attributed to the state of Newcastle’s finances: the hub saw profits fall by £5.6m between 2008 and 2009.
LA7 is allowed to choose which company purchases Copenhagen’s stake, which will ensure that the day-to-day running of Newcastle Airport is kept in line with current standards.