Luton Municipal Airport was opened on the site on 16 July 1938 by the Secretary of State for Air, Kingsley Wood. Situated where the valley of the River Lea cuts its way through the north-east end of the Chiltern Hills, the airport occupies a hill-top location, with a roughly 40 m (130 ft) drop-off at the western end of the runway. The airport, which was owned by the Borough of Luton, was considered to be the northern terminal for neighbouring London. During the Second World War, the airport was used by the Royal Air Force, fighters of No. 264 Squadron being based there. Following the end of the conflict, the site was returned to the local council. In 1952 activity at the airport resumed on a commercial basis, a new control tower being opened around this time. British aviation company Percival Aircraft had its factory at the airport until the early 1960s. Since the mid-1960s, executive aircraft have been based at the airport, initially operated by McAlpine Aviation. These activities have grown and several executive jet operators and maintenance companies are currently based at Luton. In the 1960s, Luton Airport played a key role in the development of the package holiday business, in which the popularity of the foreign holiday rose substantially, as the launch of new services had allowed greater numbers of people to travel abroad for the first time. Luton became the operating base for several charter airlines, such as Autair (which went on to become Court Line), Euravia (now TUI Airways, following Euravia's change of name to Britannia Airways and subsequent merger with First Choice Airways and TUI rebrand) and Dan-Air. By 1969, a fifth of all holiday flights from the UK departed from Luton Airport; during 1972, Luton Airport was the most profitable airport in the country. However, Luton suffered a severe setback in August 1974 when major package holiday operator Clarksons and its in-house airline Court Line (which also operated coach links) ceased operations and were liquidated. Nevertheless, by 1978, the airport's management initiated an expansion plan as to allow Luton to accommodate as many as 5 million passengers per year. During the 1980s, the airport experienced a decline in customer numbers; this was due to lack of reinvestment while the nearby London Stansted Airport, which was also located north of London, was growing. The council responded to lobbying and focused again on developing the airport. In 1985, a new international terminal building was opened by the then Prince of Wales (now Charles III). Further updates and changes over the following 15 years were made, including the opening of a new international terminal and automated baggage handling facility, a new control tower with updated air traffic control systems, a new cargo centre and runway upgrades. In 1987, Luton Airport became a limited company, of which Luton Borough Council was the sole shareholder; this reorganisation was taken as it was felt that the airport ought to be operated at arm's length via an independent management team. While developing the basic infrastructure, various business partners were courted and business models were considered. The process envisaged a cargo centre, an airport railway station, and people mover from station to airport terminal (hence the unused underpass parallel to the road as one approaches the terminal). During 1991, an attempt was made to sell Luton Airport, but it was unsuccessful; instead, a new management team was appointed to turn around the business, stem the losses, and improve passenger numbers. Over the following five years, £30 million was invested in Luton's infrastructure and facilities. Originally, the airport's runways had been grass tracks 18/36 and 06/24, and then a concrete runway 08/26. By the end of the 1980s, there was only one runway, 08/26. The 18/36 grass runway had disappeared under a landfill, while 06/24 had effectively become a taxiway.