BAA agree to sell Gatwick

Pressure forces sale through to increasese competition

October 2009

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Global Infrastructure Partners (GIP) has agreed on terms and are about to become the owner of Gatwick. The sale has been forced onto British Airports Authority (BAA) who are the current owners, after an enquiry found that thee was too little competition between airport owners. BAA currently also own Heathrow, Stansted, Edinburgh, Glasgow, Aberdeen and Southampton airports.

GIPS has a stake in London City Airport and have agreed to pay a fee of £1.5bn which is partly conditional on future business/traffic. Part of the proceeds will be used to pay off the £9.6bn debt BAA currently has. The sale is yet to meet the approval of the European Union but is due to be completed by December. BAA is currently appealing against the decision to sell off Stansted and either Glasgow or Edinburgh.

BAA has now said they will focus their efforts in the future to improving its other airports.

The GIP partner leading the acquisition for Gatwick said the new owners would “upgrade and modernise Gatwick Airport to transform the experience for both business and leisure passengers”. BAA has argued that the Competition Commission did not however, take into consideration the impact that the recession will have on airports’ sales and that its profit had already fallen by more than 18% after the recession meant that passenger numbers where down.

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