Another losses blow to Teesside Airport but bosses insist the future is bright
Last updated 15th Jul 2022
Losses of more than £11.7m have been recorded at Teesside Airport.
But bosses say the results are £2m better than the £13.8m loss recorded the previous year – pointing to “significant” infrastructure work at the terminal and wider sprawling site. The financial blow comes as an investment plan set for sign off at next week’s Tees Valley Combined Authority (TVCA) aims to plough another £20m into the site.
Officials say it will cover losses, help create new jobs and aid bringing in new flights. The airport was granted a £10m bailout by TVCA cabinet members in July 2021 to cope with covid pressures.
The airport was brought back into public hands for £40m in 2019 – with another £35m to be drawn down up to 2029 to help fund the site through a TVCA loan. Operator Stobart – now Esken – departed Teesside in July last year and handed back its 25% stake in the majority shareholding.
Account documents for 2021/22 showed the airport’s turnover increased from £4.8m to £7.6m. But the operating loss rose slightly to £13.8m with the overall loss for the financial year listed for £11.8m.
The year was affected by covid but lifted restrictions allowed more freedom as 2021 wore on. Tees Valley Mayor Ben Houchen said covid “wasn’t part of anyone’s business plan” – but still believed the site’s future was bright.
He added: “We’re speaking to a number of airlines to get more holiday flights to the airport and I’m expecting a few popular routes to be landing next summer.
“You can’t just run away from an airport and turn your back on the staff who have worked their socks off to keep the airport flying over the years, and part of the losses come from protecting the airport’s loyal workforce.”
The mayor said they topped up furlough for all staff salaries adding there wasn’t one redundancy. He added they had also spent £1m each on fire, security and air traffic control measures.
The financial statements pointed to the seven-year agreement with Ryanair for summer flights and TUI routes to Majorca and Antalya, Turkey. But it also referred to the London Heathrow Loganair flights being axed.
Work at both the Northside and Southside of the airport was referenced – including the new hangar for Draken, and the business park planned to the south of the airstrip with the “potential to create 4,400 jobs”.
But the risks in the aviation market recovering from the pandemic also loomed large. The report added: “The on-going pandemic has had a devastating impact on the aviation industry in general and while restrictions have been removed, it was only in Spring 2022 that we started to see passengers really want to fly again.”
A report for next week’s cabinet stated Teesside had “fared better than most regional airports during this time”. Mr Houchen said 2021/22 losses were £5m less than they expected.
He added: “It’s never good to lose £11m but it’s better when you consider year two of covid was worse than year one for aviation – and we reduced our losses largely because of some private sector investment we had from the likes of Draken and Willis taking hangar space.
“Also, because we didn’t lay anybody off – and we topped people’s salaries up – it has meant the transition to opening up has been pretty much smoother than any other airport in the country.”
A revised plan for the airport last year envisaged profits by 2025 and one million passengers within five years. Mr Houchen said the losses came down to covid and spending money on upgrades to infrastructure.
Passenger numbers are projected to hit 150,000 for the year in 2022 – with this summer set to be a key measure of its performance. Asked whether it was time for the TVCA to cut its losses and get out of the airport, Mr Houchen said it would be “the worst time”.
He added: “It’s never had the chance. Even during that time (the pandemic) we’ve added more flights, jobs and businesses. The next two to three years is the key phase.
“We’ve got to hit those targets because touch wood there will be no more pandemics. The next two or three years will be the litmus test for Teesside Airport.”