Solihull Metropolitan Borough Council is to give Birmingham Airport a £3.7m loan in order to ‘support the airport’s return to previous passenger and traffic levels’.
The decision follows on from last week’s announcement that Birmingham City Council agreed to give the airport an £18.5m loan, with the airport struggling due to the Covid pandemic.
This has seen passenger numbers fall by 91% and has been highlighted by the lack of traffic movement at the facility, with only 31 aircrafts arriving in the last week of January, compared to 740 during the same period last year.
Located in Solihull, the seven metropolitan councils of the West Midlands own a combined 49% share in Birmingham Airport Holdings Limited (BAHL), with Solihull Council being in control of 3.75% of the organisation’s ordinary shares.
In a report to Solihull Council’s Cabinet, it stated that the airport ‘plays a very significant role in the regional economy, providing the air connectivity vital for international trade, investment and employment, the growth of inbound tourism, and access to outbound leisure destinations’.
The report also said that due to the council’s investment in the airport, it has earned £1 million in each of the last two financial years and prior to the Covid-19 pandemic, dividends were expected to increase year-on-year.
Leader of Solihull Council, Councillor Ian Courts was quoted as saying: "If we don't make this investment, someone else will and what will happen potentially is we've lost any form of control."
The council’s Cabinet gave their backing to the following recommendation: ‘Given that Birmingham Airport is a critical asset for the region, the recommendation is that the shareholders provide a loan facility to BAHL, of which Solihull’s share would be £3.7 million.’
In total, four of the seven local authorities and another shareholder will also contribute to the airport’s loan.