Luton Borough Council has agreed to loan an additional $164.73m (£119m) to aid the recovery of the UK’s London Luton Airport (LLA) that was badly hit by the Covid-19 pandemic.

In addition, the council agreed on $27.69m (£20m) in contingency funding, along with further capital investment.

The amount loaned to the airport now totals around $701.84m (£507m), including $171.65m (£124m) issued ‘in response to the pandemic.’

Luton Council Finance Portfolio holder Andy Malcolm said: “Our airport has been our biggest success story over the last two decades, providing financial support for frontline services, countless partners in the community and the charity sector, agreeing that these funds will ensure that’s the case for the next 20 years and beyond.

“Throughout this process, I have been very conscious of how history will view the decisions we are making today and how future generations will feel we reacted to this challenge.

“Without agreeing on these loans, the council would be left with little choice but to sell its most valuable asset at a time when it couldn’t achieve a fair, let alone optimum price.”

The funds will be borrowed on behalf of London Luton Airport Limited (LLAL) and utilised for preserving the company.

The airport is owned by Luton Council through its firm LLAL but operated privately by Luton Airport Operations Limited (LLAOL).

The council noted that the loan will not have any bearing on council services, tax or its reserves.

It is not money that could be otherwise utilised to finance regular services, added the council.

In January, the airport applied to Luton Council for a revision of its existing annual passenger cap from 18 million to 19 million.

It submitted the application after a public consultation held in October 2020.

As part of the application, a complete environmental impact assessment was also included.