Private Investment Bids Being Assessed for UK’s Cornwall Airport

Kevin Rozario


May 1, 2024

mod Cornwall Airport Newquay Runway

Cornwall Airport Newquay could be part-privatized soon.

© Cornwall Airport Newquay

The municipal government of Cornwall, a county in the west of England, is assessing bids to invest in, and operate, Cornwall Airport Newquay (NQY). The regional airport is also the UK’s first licensed spaceport whose inaugural launch attempt with Virgin Orbit failed with the loss of satellites.

The setback has revenue implications for Cornwall Council which owns and operates NQY as the launch program, for horizontal take-offs and landings of spaceplanes, has been pushed back to 2025 at the earliest.

The airport is operated by Cornwall Airport Limited (CAL), currently sitting within the Corserv group of companies, with the wider estate managed by the local council which also operates the Aerohub Business Park.

NQY served 440,000 passengers in fiscal 2023/24 and contributed £72 million (US$90 million) GVA to the Cornish economy annually. The entire estate employs 450 people, with 720 jobs dependent upon the activities of the airport business.

With a designated space program, NQY also provides strategic operational capability for the Ministry of Defence, so “future development must maintain this capability” the council said in a statement.

Cornwall Council subsidizes the airport to the tune of £4 million (US$5 million) annually as well as other public-sector financial obligations and capital expenditure for maintenance. This was funded through borrowing which, over the past 15 years, has hit about £40 million (US$50 million).

To cut this outlay, the municipality brought in real estate advisor CBRE in 2022 to review the ownership model with the group suggesting a joint-venture (JV) partner to invest in the airport estate and the operational airport. NQY is currently valued at £118 million (US$148 million) on the council’s balance sheet.

In a strategic review published on April 30, Cornwall Council stated: “Whilst there has been economic growth at the airport, including the Aerohub Business Park, the development of the site has not proceeded at the rate originally hoped. The approach until now has been to seek investors in individual ‘plots’ of land rather than seeking investment in the whole site.”

The council expects a JV partner will enable greater investment and stimulate job creation to accelerate the growth of the airport as an aerospace and business cluster and accelerate its contribution to the Cornish economy.

mod Cornwall Airport Terminal Approach 1

Cornwall Airport terminal approach.

© Cornwall Airport Newquay

Deal Draft Structure Not Finalized

Last year, CBRE conducted a transparent marketing process for the selection of a private sector partner. Expressions of Interest (EOIs) were invited and qualifying parties were then issued with a ‘partnership prospectus’ and data.

Bids were submitted on December 7 and, since then, CBRE and council officers have been “working with the bidders to further explore a potential partnership and identify a preferred partner” according to the report. The bidders were not identified.

It appears that the next steps will be to develop a draft structure of the deal and that a final decision on whether to proceed with the preferred partner will be made “later this year” though no date was confirmed. This final stage will likely be completed in this fall.

This structure—including a strategic masterplan for the future development of the site—should be ready by the end of May in cooperation with potential investment partners. It is likely to include a clause to remove the subsidy payable by Cornwall Council from day one of the inception of any JV for at least 10 years.

NQY has seven international destinations in Europe including leisure destinations like Alicante and Malaga in Spain, and Faro in Portugal. The airport also partners with Aer Lingus which allows seamless access to North America by using the US pre-clearance facility at Dublin Airport.