TBI, EasyJet agree deal on traveller charges at Luton

British airports operator TBI and low-cost airline EasyJet have agreed in principle to a deal on passenger and baggage charges at Luton Airport in London.

Industry sources in Northern Ireland, where TBI owns Belfast International Airport, said both parties had reached an agreement on charges by last night.

The airports operator and EasyJet had been locked in discussions since the beginning of this week about charges at Luton Airport, where TBI is the majority shareholder.

TBI, which is currently the subject of a hostile £516 million sterling (€824 million) takeover bid from the French construction group Vinci, is expected to issue a statement on the agreement today.

Under the terms of TBI's current agreement with EasyJet, which is due to expire today, the low-cost airline pays Luton £5.50 sterling for each departing passenger and 50 pence for each piece of baggage.

In its formal offer document for TBI, published last weekend, the French group states that its bid is conditional on TBI securing an agreement with EasyJet over charges at Luton Airport that is "no less favourable" than its current arrangements.

EasyJet is one of Luton's largest airline operators, currently representing about 64 per cent of business at the London airport.

Earlier this month, TBI lost one of its major airlines at Belfast International Airport when BMI (formerly British Midland) announced its decision to transfer all its services to and from Northern Ireland to a rival airport.

Last year, 3.1 million people flew in and out of the international airport but around 28 per cent - nearly 700,000 of these travellers - were BMI customers.

TBI lost almost one-fifth of its value after it revealed that BMI's decision could wipe £6 million off its profits.

The relationship between EasyJet and Luton airport is now a crucial factor in TBI's future.

Vinci has highlighted what it describes as TBI's growing dependence on Luton airport in its offer document, which has been dismissed outright by the airports operator.

TBI has rejected Vinci's 90 pence per share offer as "opportunistic" and said its offer is "lightweight and focused on short-term gains".

However, Vinci is trying to woo TBI shareholders by claiming its bid offers a degree of "certainty" against what it has described as the current management team's "record of disappointments".

Vinci's £516 million bid for TBI values the group at a 50.6 per cent premium to the group's closing price on August 13th, the last business day prior to the French group's expression of interest.

But it is significantly below yesterday's London Exchange closing price of 97 pence per share.