Belfast International Airport £100m "Investment" - Fact or Fiction?

Let's do some maths

If you’ve seen anything in the news about Belfast International Airport - aside from delays and aggressive baggage fees - then it will likely have included a headline about a planned “£100m investment”

But do the numbers stack up? What is the truth behind this claim? So far it has been printed without question across mainstream media, but is it accurate?

To help, we are lucky to have the airport’s 2023 recently published accounts. To be clear, these numbers are rough and rely on a little intuition, but you’ll get the idea.

OK, here we go.

The starting point is the airport’s recent disclosure in those accounts that it has agreed a £100m charge. In other words, the business and its assets have been mortgaged for £100m. That brings £100m cash into the airport business.

That must be a coincidence; or is the implication that the £100m debt the business has taken on is an investment? Let’s assume not and dig deeper.

The £100m was “closed” in September or October 2023. Since then we have seen a new arrivals hall being built.

So let’s do some maths. All numbers are approximate; the reality is inevitably more complex than this. However:

+ £100m - Cash in from borrowing

___________

- £20m - previous debt repaid

- £25m - cost of new arrivals hall (allegedly)

- £38m - dividend paid to Vinci (French owners of the airport)

That’s a net cash left in the business of the paltry sum of:

£17m

OK so let’s think about an investment programme. It’s going to take years right? You can’t spend £100m overnight.

Let’s say it’s a 10 year programme, for the sake of illustration.

Now the airport made a profit of £11m in 2023.

Let’s assume that the new arrivals hall (god it’s ugly) at a cost of £25m makes up 25% of the £100m “investment”

That leaves £75m to find to underpin this investment.

Based on the illustration above, even if the airport spent every single penny of its £17m left over from the debt raise plus all of its profits which we hold at £11m a year, that will take approximately 6 years to complete the investment programme assuming every single penny of profit is spent on that programme.

Stop laughing. And yes, you’re right, the aviation business is VERY unpredictable so the profit assumption is very generous.

If this is approximately correct and the investment programme is real then there is no profit left for the French owners to take any more dividends. What would the point be for them to own the business on that basis?

But what if it’s not real? What if it is a complete lie? Have you seen any details of this “investment” plan? Because if £25m builds a new arrivals hall then surely £75m builds a whole new airport?

The good news is that any such project would almost certainly require planning permission, just as the new arrivals hall did. So let’s see what they’ve got in the works.

Oops, no applications currently submitted.

Check for yourself - the postcode is BT29 4AB

Something about this doesn’t seem to add up! What do you think?