In each year at Newcastle and Leeds Bradford there is a large increase in passenger traffic in the summer months, as is clear from the chart. Not so Teesside, where the seasonal shift is barely discernible. More alarming, perhaps, is that after being brought into public ownership at a cost of £40 million, and a further £30 million in bailout funding, there is negligible difference in passenger traffic compared to that in 2018, when the airport was still in private ownership.



Aviation Desert

To describe the aviation side of the airport enterprise as flatlining might be considered by some to significantly understate just how dire the situation is. The project is, in any case, not without its critics. Some of those dispute that it was necessary to keep the airport open at all, and maintain that the money could have been better spent on improving public transport infrastructure across the region.

At Tees Valley Monitor, we have taken a different view. In fact, we have consistently agreed with the premise on which the economic case for developing the airport is based which is that an airport has what is known as ‘catalytic impact’, that is to say it brings economic benefit to a region greater that the direct employment it creates. Good connectivity stimulates economic growth.

In other words, our starting point aligns fully with that given in the business case for the airport. The business case considers extensively strategies for increasing passenger numbers, and specifically leisure passengers. A target was set to increase leisure passengers to 75% of overall traffic, in combination with a target to increase total passenger numbers to 1.5 million. The combination of aviation revenue and that from the attached business park was to ensure that the whole enterprise became commercially viable within ten years. 

How Did It All Fall Apart?

Prior to creating the business case for buying the airport, the TVCA hired in consultants, ICF. Their plan showed that, in order to become commercially viable the airport would need to carry at least 1.5 million passengers a year as well as develop other non-aviation revenue streams.  The TVCA then added a bit of their own, and proposed to set up a joint venture (JV). The partner was Stobart Aviation (later, Esken).

Stobart did not actually buy into the airport project, however. They were simply handed a 25% shareholding by Houchen. They then brought in one of their subsidiary companies as airport operator. This was not in exchange for the shareholding, it should be noted. The airport company (TIAL) paid them for the work. So, TIAL could have hired them in anyway without getting embroiled in a joint venture partnership. 

The fact that it was a joint venture partnership (JV), however, meant that the airport (or, to be precise, its holding company, Goosepool 2019) was not 100% publicly owned, and for that reason was not subject to Freedom of Information legislation. Its work cannot be scrutinised by the public in whose name it was bought. An aversion to scrutiny has become the hallmark of Houchen’s mayoralty.

In addition to secrecy, the JV brought them Kate Willard, supposedly Stobart’s representative on the board of Goosepool 2019. In reality, she terminated her relationship with Stobart’s shortly after the JV was set up, but, tellingly, Stobart’s never replaced her on the board. 

Then, in July 2021, Stobart/Esken pulled out of the JV, withdrew the airport operator, and returned their 25% shareholding. By this point they had secured a commitment from TUI to restart charter flights to Mallorca and Turkey, and a number of destinations from Ryanair, (flights to Bulgaria with Balkan Holidays have been available for several years). Loganair had taken over domestic flights, and extended the number of available destinations including, significantly, Heathrow. 

With the departure of Stobart/Esken, the revival of aviation at Teesside Airport ground to a halt. Since then, no new destinations have been secured, and the Heathrow connection has been abandoned.

Stobart/Esken remained tight-lipped about the reasons for departing the JV. But it is not hard to see how their efforts to grow the business may have been frustrated.

As the decision to buy back the airport enjoyed widespread popular support, Houchen was at pains to keep it in the news. And was not averse to making spurious claims about its success in order to do so.

The business plan had indicated that, in order to become financially viable, the airport needed to attract a low-cost carrier. No sooner had TUI announced, in October 2020, that it would resume flights to Mallorca, than Houchen announced that the airport had attracted this low cost carrier (as we reported in Teesside is Taking Off). This despite that fact that TUI is a charter, and not a low-cost carrier at all.

A month later he did the same all over again (reported in Ryanair Flights from Teesside …). The business plan was quite clear that ‘attracting a low-cost carrier’ meant attracting a carrier, like Ryanair, to set up a base at Teesside. Ryanair did not do this in 2020, and it has shown no signs of doing it since. It is only when an airline sets up a base at an airport that it commits to providing a large number of services and with it, significant revenue for the airport. Ryanair, however, only flies into Teesside from its bases in Europe.

So, there was, on the one hand a company trying to meet targets to grow Teesside’s aviation business, and, on the other, Houchen on a parallel path constantly trying to make political capital out of it for his own ends. 

While promoting the airport may have been written into the business plan, Houchen’s constant bombardment of misinformation could only have been a source of embarrassment to Stobart’s as they tried simultaneously to develop the airport and maintain their reputation within the industry.

They will also have been sensitive to the fact that, in reality, what Houchen was doing was more self-promotion than airport promotion. One of our readers, who is familiar with the airport, has observed to us that very little is spent on advertising outside the immediate area of Tees Valley. Now, we are aware that there is a billboard with the airport logo at Chester-le-Street cricket ground (and a bus painted in identical colours to Arriva), but as we know of no other advertising.

So, in order to verify this, we contacted their press office and asked for details about how the airport is marketed. When they didn’t respond to our email, we phoned them. At that point they refused point blank to divulge any information and advised us to apply using a freedom of information (FoI) request. We couldn’t help but wonder if they have something to hide. (Some of our readers may have attempted to use FoI to obtain information from the TVCA, only to find that it takes months, they will avoid answering at all costs, and, on occasion, do not feel the need to be entirely truthful in their responses either).

And, in case you were wondering, it was at this point that we decided that there was no point in asking what the extension on the side of the empty terminal building could be for. Nor was it worth asking why their Air Traffic Control has to keep shutting down. Or when the bogus air freight facility is actually going to open.

Who Gains?

As the influence of Stobart’s management of the airport diminishes over time, so aspects of the new management become increasingly apparent. One of these is the propensity of the corporate directors to help themselves and their associates generously to the airport’s funds. As can be seen in the excerpt from the latest statement of accounts, the bill for directors’ remuneration went from just under £5,000 in 2020 to just under £200,000 in 2021: