London City Airport's Economics - The FACTS

London City Airport costs London taxpayers over £5million a year in Metropolitan Police security costs

LCA costs taxpayers, per passenger 1000% (£1.70) more than Heathrow passengers

Each direct aviation job receives a tax subsidy of £50,000 per year, £1000 per week or £25 per day by way of the £9billion lost in fuel tax and vat which the aviation industry are excused from paying

In 1998, at the last expansion, London City Airport promised jobs would go from 1100 to 4000 direct and indirect jobs

In 2008 the airport claims to have 'created' 2000 jobs – but there is no hard evidence – this falls short by 2000 of their claims in 1998

In 2008 the airport directly employs just 406 people, of which 120 come from Newham

The airport has failed to meet the employment targets as set out in the section 106.

Newham residents should make up 35% of employees, they make up 29%.

Local employment (local regarded as a five mile radius) should be 70% but is 68%.

Newham is the most socially deprived borough in London and England, even after 20 years of the airports claimed effect on regeneration on the community

London City Airport contributed a 'small contribution of £2million' to the DLR which cost £140million – this was questioned by the Transport Select Committee, May 2007

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London City Airport and the aviation industry are nothing more than modern day highwaymen...stand a deliver your taxes now!!

Tax Payers Soon To Own RBS's LCA Loan?

Just a few years ago London City Airport was sold for an estimated £750m, netting a windfall for Irish tycoon Dermot Desmond who bought the Docklands site in 1995 for only £23.5m.

At that time, the credit watchdog Standard & Poor's said the deal involved a "staggering" level of debt.

Michael Wilkins, S&P's infrastructure director, said the ratio was about 27 times EBITDA earnings, four times as high as most private equity deals. The loans are taken out on floating rates, making the operation vulnerable to any monetary squeeze.

AIG Collapsed last year with Global Investment Partners (Credit Suisse and General Electric - the owners of LCA) buying their 50% share of the airport. GIP are now budding on Gatwick.

Financing for the transaction was provided by The Royal Bank of Scotland and Credit Suisse.
Royal Bank of Scotland is on course for the biggest loss in UK corporate history after revealing it expected to write down as much as £20 billion on the falling value of its assets and its investment in "Toxic Debt". The government is bailing out RBS today. The Taxpayer will now own 70% of Royal Bank Of Scotland.

As well as loans from RBS the airport relies heavily on flights to Scotland by bankers - now very thin on the ground. We wonder how many "ghost" flights and half full flights are taking off at the moment just so airlines can keep their slots? We already know that half/empty planes were in operation over a year ago from LCA.

So now you are not just annoyed by noise and choking fumes - YOU the taxpayer are covering the security bill and NOW you it seems possible that you could actually own the loan on the London City Airport! You actually couldn't make it up!

So just how far did your wages go to cover your bills this month whilst the government continues to throw money at private businesses such as London City Airport for security etc?

London City Airports Annual Bill To London Taxpayers

We raised the issue a time ago, (something that London City Airport neglect to address in their spin to residents), of the £7million annual cost for LCA airport security, that you the London taxpayer, pay to save their shareholders money and make them more profit.

An agreement was supposed to have been settled by November of 2007 with regard to these costs: the Metropolitan Police quite rightly should not be picking up the cost and paying with our taxes - most of us would prefer to see that £7million put to good use by the Police in helping them to do their job in communities - not in commercial financial concerns. And it's clear that the Met want to see LCA pay their own bill - and we are right behind them on that.

So what's happened since with these discussions? Well not much it seems - LCA are dragging their heels - putting up a good fight so that their shareholders don't pay a penny towards the security costs.

In an article in Airport International at the end of last summer they highlighted how it is London taxpayers who are paying for London City Airport security and Richard Barnes of the MPA stated:

“There appears to be no common approach to the extent to which operators contribute to policing costs and too many different interpretations of requirements under current legislation. Police have to provide a service to protect all those who use our airports, and it is unfair to expect them to pay for policing private, moneymaking businesses.”

He concluded:“At the end of the day, it is the taxpayer who pays, while shareholders earn dividends. This can be tolerated no longer.”

Apparently it will ultimately land on the desk of Ruth Kelly if it is not resolved - and we just can't wait to see what decision she makes on whether we should all continue to go to work, or receive pensions and pay taxes on them just to fund the likes of LCA, Credit Suisse, GE and AIG.

And what was London City Airport saying about what they give to the community?!! We'll hazard a guess that it's not anywhere near £7million's worth each year!!

Why are Londoners paying £7m (100%) of LCA's Security Costs?

Well it's a mystery to us how any private, share owned business could get away with NOT paying their own security costs and then having the cheek to pass these on to the communities that they operate in!

London City Airport costs us London tax payers a whopping £7 million for it's annual security, and surprise, surprise it doesn't want to pay a penny towards it.

Now we are clearly very concerned about the security and the safety of it's travelling passengers and of the communities around the airport - but should Londoners be expected to pay this whilst LCA pass the profits on to their share holders: Credit Suisse, GE and AIG? And we are not alone in our amazement at LCA's complete lack of willingness to shoulder even a percentage of their security costs........at the GLA the following question was asked by Len Duval, Chair of the Metropolitan Police Authority:

Question number 0043/2007 Meeting date 10/10/2007

Question by Len Duvall I am not asking you to comment on the planning application; it is more about the commercial engagement with London City Airport . Are you aware that London City Airport provides no cost towards the security of its perimeters and, in a sense, that we and part of the GLA family are subsidising them? Before you enter into commercial agreements with London City Airport or give any undertaking that security, the primacy of security around our airports and users of airports comes first and therefore that they should not be subsidised by London taxpayers, they should make a contribution like other airports; even Heathrow are cooperating in that. There seems to be a real problem with London City Airport ; they do not seem to want to even engage in a conversation about costs and they are quite adamant they are not going to pay it. Do you see that as being a part of a discussion that you may wish to have to them before you exercise any commercial deal?

Answer by Manny Lewis, LDA Given that you have raised it, Len , absolutely, in terms of the Metropolitan Police Service position. I am not familiar with those security issues; you have alerted us to those. We need to follow those up both with the Metropolitan Police Service as well as with TfL and we will certainly now factor that in.

Say's it all about LCA really. We should add that Fight the Flights has asked LCA if they intend to contribute to the cost of security, or even pay for it in full in respect of their planned expansion, which will clearly increase the £7m bill as more security will be required. We are still waiting for a response.

Now what was LCA's Chief Exec Richard Gooding saying about how much LCA give to the community?? It seems that they take out far more than they put in.

Funds for dealing with crime are always short - perhaps this £7m would be better spent on the crime that's affecting London communities right now - youth crime . We are sure that the Metropolitan Police Service would be more than pleased to get £7m back for services provided to a profit making, private business so as to enable them to tackle the difficult job of policing London.

If there are any businesses out there who don't get £7m security a year and feel discriminated against then please send requests for tips on how to get such brilliant perks to:


well, you know who....