Durham Tees Valley Airport chiefs in investment talks

Jan 29 2010 by jez Davison, Evening Gazette

THE owner of Durham Tees Valley Airport (DTVA) has confirmed it is in discussions with potential investment partners for its loss-making airports division.

Peel Group’s airports operation has seen losses escalate by more than 15% following a slump in passenger numbers.

The group, which also owns airports at Liverpool and Doncaster, said talks with potential suitors were “ongoing” but the nature of the joint venture had not yet been decided.

The possibility of a new investor taking a majority stake in the airports division has not been ruled out.

In the year to March 31 2009, Peel Airports made a pre-tax loss of £13.1m - a 16.7% rise on the £11.2m loss a year earlier - while revenues fell from £53.4m to £48.4m.

Falling sales were exacerbated by a 20% drop in passenger numbers at DTVA, from 758,533 in 2007-2008 to 604,778 - a figure which has since slumped to around 300,000.

Peel blamed the decline on loss of services from Ryanair, Wizz and Flyglobespan and said rising costs, reduced demand and the slow recovery of the UK economy had contributed to “volatile” market conditions.

The group also slammed the Government for failing to create a competitive climate for UK regional airlines.

“We feel that our airports, like most regional airports, are becoming less competitive in comparison to our competitor airports in Europe due to unfair Air Passenger Duty applied on every departing passenger originating from the UK whilst across (the) European Continental market similar taxation is absent or is being scrapped,” Peel said.

DTVA has been hit by the loss of key services including bmi’s Heathrow route, which carried around 80,000 passengers a year, and Ryanair’s Dublin service.

But these losses have been partially offset by recent wins including the Eastern Airways service to Southampton and a Dublin route operated by Irish carriers Aer Lingus and Aer Arann due to go live later this year.