Airport lost £500,000 last year

Norwich International airport racked up losses of almost £500,000 last year - despite handling a record number of passengers.

Norwich International airport racked up losses of almost £500,000 last year - despite handling a record number of passengers.

The deal struck with budget airline Flybe is being blamed for its financial difficulties, with bosses using the controversial £3 airport development tax to bridge the funding gap.

Passenger numbers grew by more than 30pc over the past year, with 772,700 travellers using the airport compared with 583,600 in 2006.

But despite the huge increase, the airport managed to turn a pre-tax profit of £294,000 in a loss of £411,000 for the year to the end of March.

Airport bosses eager to grow passenger numbers lured Flybe to Norwich with a cut-price deal, which has put a strain on the airport's finances.

And to make the situation worse, increased competition from Flybe on leisure routes has led to an 18pc drop in charter passengers, cutting income further.

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Norwich International airport managing director Richard Jenner defended the Flybe deal which he said had been important to encourage the airline to the airport.

He said: “We had to strike a balance, and we know that low cost operators won't pay too much, but equally we needed to make a reasonable amount out of it. The deal does run out at the end of March next year and we will be looking to negotiate more favourable terms.”

Mr Jenner said the airport performance had also been affected by the ongoing work to extend and improve the terminal building, with catering and retail concessions not able to benefit from the extra passengers.

He defended the controversial airport development tax, which could bring around £500,000 in revenue this year and looks like being the difference between the airport making another loss and breaking even.

“The money from the tax will help make a difference to our finances and allow us to do some more work like new information screens and revamped toilets,” he said.

“Airport running costs are rising. We have just bought a new fire tender and in the New Year we will be developing a fire training area. All of this costs a large amount of money.

“The terrorist attack in Glasgow means we have had to spend more on security. These are additional things which were not budgeted for.”

Mr Jenner revealed that the airport was hoping to attract another low cost airline to Norwich to complement Flybe, which has scrapped routes to Spain and Portugal, but admitted passenger numbers would fall this year.

“Stansted and Luton are getting full and places like Norwich will start to attract low cost operators,” he said.

“Flybe is now focused on more business routes which offers an opportunity for another operator to come here.”

Peter Buckell managing director of Norfolk travel agency Global Travel Lounge, said: “It is no secret the Flybe deal has left them high and dry. When you give your operator a free ride then profits are going to be hit.

“But in the longer term things should get better for the airport. I'm optimistic the charter routes to Spain will come back and that Norwich will grow.”

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