Questions raised over which US company could take over Cornwall Airport

Questions have been raised about an American company likely to take over the management of Cornwall’s Newquay Airport if a partnership agreement is reached with Cornwall Council. The local authority’s Tory administration is backing a strategy to hand over most control of the airport and its 650-acre estate in a bid to save around £4m of taxpayers’ money each year.

Cornwall Council owns and operates Cornwall Airport Newquay and manages the wider estate, which includes the Aerohub Business Park, Spaceport, Kernow Solar Park and 200 acres of undeveloped land. The airport served 440,000 passengers in 2023/24 and contributes around £72 million to the Cornish economy annually.

However, it has continuously operated at a loss during the 20 years the council has been in charge due to operational costs. The grant for 2024/2025 is likely to be around £4.8m – £4.5m, of which the cost of regulation, including air traffic control and the airport’s fire service.

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Cllr Tim Dwelly (independent, Penzance East) is one of several opposition councilors who have pressed for the partnership to be discussed by every member of Cornwall Council and not just his Tory cabinet. He has now written to all Cornwall Council members with his concerns about the deal.

Cllr Dwelly raised a number of questions which he hopes the cabinet will answer when it is set to outline an airport strategy and “investment partner” agreement on Wednesday (June 12). The partner would benefit from taking an ownership interest in the airport with a share of the revenue (depending on the percentage agreed in the partnership agreement) from the airport, Kernow Solar Farm, Aerohub Business Park, Spaceport and land development, which is likely to be a mix residential and commercial.

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The name of the company has not been released, but we understand it is Westcore, an American real estate investment business with a European wing. In 2014/15 the company acquired Fairoaks, a small airport outside London.

In his email to all councillors, Cllr Dwelly said: “You may or may not have seen details of the preferred buyer of the majority of Newquay Airport, associated buildings and a large 650 acre site. I am copying all members to these questions. because I am concerned that this huge strategic decision is not being properly debated and appears to be rushed ahead of next year’s Cornwall Council elections without a full council debate.”

He expressed concern about the council’s preferred partner: “The US company being proposed for a Cabinet rubber stamp has no apparent experience of managing UK airports, apart from a small private jet facility for wealthy individuals in Surrey. They are not airport people. Why. are we even considering handing over majority control of our airport to such a company?”

Other questions he wants answered include:

“The Tory administration hopes the move will take financial pressure off the council and taxpayers, who subsidize the airport to the tune of around £4m each year.”

“Why did they give CBRE consultants a £200,000 bonus if they found an ‘investor’. How on earth can Cornwall Council afford such expenditure in the current climate? Doesn’t this bonus provide an incentive to transfer rather than explore other options, such as bringing in airport experts to improve airport performance, factoring in taxes (which worked before), while separately exploring ground deals on the 650 acre lot?”

“Why isn’t the joint venture set up to have a majority board stake? In many regional airports, the public sector is in control.”

“Why hasn’t there been an independent review of the airport itself? With the aviation sector expected to return to 2019 figures next year, with Newquay Airport heading for 500,000 passengers a year, the airport should start making money in its own right. . Why not consider increasing the on-site amenities to include more shopping, food, drink and more.

“Where is the due diligence? What is the airport experience and background of this company? Do we really think that a small private ‘Lear Jet’ airport is experienced enough to run our airport?”

“Was the business community consulted on this? If not, why not?”

“Is Cornwall Council proposing to ‘jam tomorrow’ without certainty of immediate income?” How can this company cover the subsidy before developing housing (this site is mixed use), commercial buildings, hotels/leisure etc. with a revenue stream to do so?”

“Is Cornwall Council able to do a deal like this successfully? Did we learn lessons from the now defunct BT partnership or the Egyptian investor in ecotown, which didn’t happen then? Just two examples. confidence in it and therefore in the future of the airport?”

A decision on whether to proceed with the preferred partner and the associated partnership documents will go to cabinet for a final decision in the autumn. Cabinet members are due to approve the final steps of the deal at a meeting at County Hall / Lys Kernow in Truro this week.

It was also recommended to jointly commission a “land use plan” with the US company to agree on the scope and stages of the airport’s land development.