London SE1 website team

Escalating losses for the London Eye

The South Bank's London Eye is suffering escalating losses, as the cost of servicing debts owed to British Airways increases whilst tourism in London declines.

Interest payments of 20.1m meant that the London Eye's operating company recorded a 10.1m pre-tax loss for the year ending December 2001, according to accounts lodged at Companies House.

Payments to BA, which owns 33 per cent of the attraction, were 19m. London Eye is now seeking to refinance it operations, to replace BA's expensive loans.

This is conditional on it receiving permission to extend its operating life beyond the original five-year term, which has been approved in principle by Lambeth Council and is awaiting a decision by the Mayor of London.

BA has loan agreements with London Eye totalling 87.7m, up from 68.5m in 2000. The airline charges interest at the crippling rate of 24 per cent.

The Tussauds Group, owner of Madame Tussaud's, Alton Towers and Chessington World of Adventure, is the other major shareholder in the South Bank attraction. Creators of the landmark structure David Marks and Julia Barfield also own a share of the company.

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