TBI seeks to grow Luton airport with Vauxhall plant bid

TBI, the owner of Luton airport, has put in a bid for the former Vauxhall car plant which lies nearby as part of an ambitious plan to expand operations at the site.

The company would not disclose how much it has offered for the 63-acre site which ceased car manufacturing earlier this year or precise details of how the land would be used.

Keith Brooks, TBI's chief executive, said: "Any land near an airport has to be attractive and valuable and so we have made a bid." He said it would be developed for "general airport use" such as additional car parking space. But he would not say whether TBI planned to build new terminal facilities on the site.

Luton handled 6.6 million passengers last year but its single runway has the capacity to take 20 to 30 million passengers. Other development plans include a direct link to the airport from the M1 motorway and TBI is examining the possibility of introducing a rail link direct into the airport.

Mr Brooks said TBI was urging ministers to remember that Luton is London's fourth airport when they publish proposals later this year for additional runway capacity in the South-east of England.

News of TBI's offer to buy the Vauxhall site came as the group reported a trebling in profits at Luton to £21.6m for the year to the end of March. The improved performance at Luton, which TBI bought in March last year, helped the group to increase overall pre-tax profits by 26 per cent to £16.6m.

The increase in profits at Luton was largely due to an increase in landing charges paid by its biggest operator, easyJet, from £2.20 to £6.17 a passenger. Mr Brooks said TBI had also reduced costs at the airport by £5m since the takeover. Operating profits from Belfast International airport fell, however, by 14 per cent to £15.8m following the withdrawal of services by British Airways and bmi British Midland.

The withdrawal of the services reduced passenger numbers by 600,000 but Belfast has since more than made up the difference by attracting new services operated by low-cost airlines.

Profits from Cardiff airport increased by £500,000 to £12.5m although passenger numbers remained flat at 1.5 million. TBI is considering approaches from several low-cost carriers to begin services from Cardiff.

TBI, which also owns a small number of overseas airports, saw off a hostile bid from the French group Vinci last year worth 90p a share. But Vinci still owns a 14.9 per cent stake and Mr Brooks said TBI would respond to any fresh approach from the company with "alacrity".