Gatwick Airport could be fetch as little as £1.3 billion when it is auctioned off, rather than the £2billion-plus BAA is hoping for, according to a secret report commissioned by three of the airport’s largest airlines - Virgin Atlantic, Tui and TUI.
The report valued Gatwick between £1.33billion and £1.73billion last December. Traffic has subsequently slumped sharply in 2009 which could erode this range even further.
BAA has been told to give the three potential buyers of Gatwick another month,
until the end of April, to arrange their financing for any offer.
Three consortiums are still in the running - Global Infrastructure Partners, owner London City Airport; Lysander Investment Group, which includes Citigroup and Vancouver Airports; and Manchester Airport Group in partnership with Borealis, a Canadian pension fund. Hochtief AirPort, 3i Infrastructure and Babcock & Brown all pulled out of bidding.
Last week the Competition Commission announced the findings of its two-year study which confirmed BAA must sell Gatwick, as well as Stansted and either Glasgow or Edinburgh.
The long-anticipated decision aims to the improve the customer flying experience as well as remove BAA’s monopoly over Britain’s busiest airports.
It said: “Given the nature and scale of the competition problems we have found, we do not consider that alternative measures, such as the sale of only one of the London airports or greater regulation, will suffice.”
However BAA could yet appeal against the ruling. Colin Matthews, BAA chief executive, said the company would make a decision within the next two months. “We might have to appeal if we reach the conclusion that it is simply not practical to proceed,” he said. “It is not just a question of whether we agree or not with the Competition Commissioner’s analysis, it is also a question of the practicalities of selling three airports in the current, extraordinarily tough conditions.