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Airport is a major asset for the north-east

Newcastle airport
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Newcastle International Airport is an important asset to the north-east, enhancing regional connectivity and providing a gateway to the world as well as helping to attract inbound tourism.

Newcastle airport interior

Newcastle airport interior

The airport is run as a public-private partnership (PPP) between seven local authorities in the north east region (collectively known as LA7, with South Tyneside MBC as the lead authority) and AMP Capital, which respectively have 51% and 49% shareholdings in the company.

LA7 was set up in the mid-1980s when the Airports Act allowed airports to become limited companies; the seven local authorities therefore became shareholders.

In 2001 LA7 sold a 49% equity interest to Copenhagen Airports (CHP) for £195m. The PPP was set up to ensure the airport was successful in achieving significant growth and sustained profitability.

Selling this share brought in an experienced operator so the airport could grow faster than it could under sole local authority ownership. CPH operated a range of airports across the world.

The sale also helped to generate significant financial proceeds for all seven councils. The more the airport grew, the more money we would receive in dividends.

Newcastle airport entrance

Newcastle airport entrance

In 2012 Copenhagen sold its 49% stake to AMP Capital. We had to make sure AMP’s interests were aligned to our own and that AMP could add value, using its skills and experience to facilitate growth.

Since 2001, the councils have received around £350m from sales proceeds, dividends and interest payments. In the same period the airport has increased its passenger numbers from 3.4 million to 4.8 million.

Terminal extensions were completed in 2000, 2004, and 2012. A new air traffic control tower and Emirates long-haul flights were introduced in 2007. Newcastle College’s Aviation Academy was added in 2008 and the airport completed the sale of the new hotel building on site in 2011.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased from £15m in 2002 to £36.7m in 2016.

The airport has achieved year-on-year growth for six years in a row. It now serves 80 direct destinations. It supports more than 15,000 jobs (almost 3,500 on site) and facilitates over £1.16bn in gross value added to the local economy annually. The airport continues to succeed in enhancing regional connectivity, growing our economy, attracting inward investment and encouraging tourism.

The aim of the shareholders is to continuously improve. We will put passengers at the heart of investment plans, embracing new technology to enhance the passenger experience as well as ensuring that the growing airport is more efficient, safe and enjoyable. With this vision, Newcastle International will ensure it remains the number one international gateway of choice for people travelling to and from the north-east.

Iain Malcolm (Lab), leader, South Tyneside MBC

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