Gatwick sale likely as BAA break-up beckons

Speculation is mounting that Gatwick will be sold off when the Competition Commission orders the break-up of BAA this week.

The commission is widely expected to rule that a break-up of BAA is in the interests of consumers and airlines. Critics argue that joint ownership of Heathrow, Gatwick and Stansted results in slow development of plans to expand those airports, which in turn means passengers suffer overcrowded conditions and regular delays. Ninety percent of passengers in south-east England travel through BAA terminals, which include Gatwick, Heathrow and Stansted, whilst eighty per cent in Scotland use BAA airports at Glasgow, Edinburgh or Aberdeen.

In an interview this weekend, BAA Chairman Sir Nigel Rudd told the BBC that he expected the commission to order a sell-off, which could include an edict that all three London airports end up with separate owners. The group could be forced to sell one of its airports in Scotland as well.

He added that a break-up would not be a “disaster” for the group, which has already had “huge expressions of interest” from potential buyers for Gatwick and Stansted.

He argued that Heathrow competes with airports in Paris, Dubai and Amsterdam rather than ones in the UK.

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The potential sale of Gatwick is expected to attract a wide variety of international bidders including Germany’s Hochtief, Global Infrastructure Partners, the GE-Credit Suisse Investment fund, Australia’s Macquarie as well as the UK’s Manchester Airport Group.

Michael O’Leary has hinted that he would launch a £2bn bid to buy Stansted Airport. The outspoken Irishman said acquiring Stansted was one of his two main ambitions before he ever stepped down as chief executive of Ryanair - the other being the purchase of rival Irish airline Aer Lingus.

Ryanair also cut its services at BAA-owned Stansted by a quarter, whilst simultaneously doubling its routes from its Luton hub.

Should BAA be forced to sell Gatwick it is expected to attract interest from a wide variety of international bidders including Germany’s Hochtief, Global Infrastructure Partners, the GE-Credit Suisse Investment fund, Australia’s Macquarie as well as the UK’s Manchester Airport Group.
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