BAA puts London Gatwick Airport for sale

By John Bowker and Carlos Ruano, Reuters

LONDON/TORONTO — Ferrovial’s British airports operator BAA said on Wednesday it is putting its Gatwick Airport in London up for sale — but vowed to fight to retain the rest of its portfolio. “We have decided to begin the process of selling Gatwick Airport immediately,” Colin Matthews, chief executive of Spanish owned-BAA, told reporters in Toronto. Sector sources said Gatwick, one of the Europe’s busiest airports with 35 million passengers, could fetch between 2 and 3 billion pounds (US$3.57 billion-$5.35 billion). A BAA spokesman said the deal process was at a very early stage, with the company yet to appoint advisers or evaluate any of several expressions of interest already received. Virgin Atlantic said on Wednesday it was interested in bidding as part of a consortium, while German builder Hochtief added it was “considering getting involved” in the sale process. And Fraport said it remains interested in London airports. A spokesman for Manchester Airports Group said it would look at a possible bid if it added value for shareholders, while an industry source told Reuters it was “logical” that Global Infrastructure Partners (GIP), the consortium that owns London City Airport, would also look at a deal. Singapore-owned Changi Airports International has declared an interest in the past, but was not immediately available for comment on Wednesday. The move is a response to Britain’s Competition Commission, which last month said in a provisional ruling that BAA must sell three of its seven UK airports, including two of London’s Heathrow, Gatwick and Stansted and one of Edinburgh and Glasgow in Scotland. BAA said it disagreed with the Competition Commission’s analysis, and that it would try to keep all six of its remaining airports after the Gatwick sale, adding that a change of ownership at Stansted to the north of London could interfere with the airport’s expansion. “At Stansted, we believe that a change of ownership would interfere with the process of securing planning approval for a second runway, which remains a key feature of government air transport policy,” Matthews said. Separately, in a meeting with Spanish press in Toronto, the CEO of Ferrovial Airports division Inigo Meiras said it is interested in the privatization of Spanish airports authority Aena and is also eyeing other airports outside the UK.

This summer the Spanish government said it would privatize 30 percent of Aena, the whole of which has been valued at 30 billion euros (US$42.59 billion). “We are not obviously going to look at airports in England, but outside yes we will do so.” Meiras also said Ferrovial expects to complete its planned about 1.5 billion sterling (US$2.68 billion) bond issue before year-end. Shares in Ferrovial were up 6.7 percent on news of the announcement, but by 0738 GMT were up 1.6 percent.