BAA agrees to sell Stansted airport after three-year court battle
BAA HAS agreed to sell Stansted airport after three years of battling a Competition Commission order for its disposal. A sale will leave the company that once owned London’s three biggest airports with just Heathrow and a handful of regional facilities, including Glasgow airport.
The operator, an arm of Spanish infrastructure group Ferrovial, had hoped to cling on to the capital’s third biggest airport by passenger numbers and fought six appeals as it tried to do so.
“We still believe that the ruling fails to recognise that Stansted and Heathrow serve different markets,” said BAA yesterday, but it decided not to appeal against last month’s court of appeal ruling which found otherwise. “[We are] now proceeding with the sale of Stansted airport.”
Analysts expect Stansted to fetch about £1 billion, or 11 times last year’s earnings before interest, tax, depreciation and amortisation. Several parties are understood to be interested in bidding, including pension funds, infrastructure funds and trade buyers such as Manchester Airports Group, which would fund a deal by selling off a third of its own equity.
Regulated airports such as Stansted are a rare prize and appeal to investors looking for safe, inflation-pegged returns.
Serving 17.5 million passengers a year, Stansted is the UK’s fourth biggest airport. However, its numbers are significantly lower than five years ago, dented by the recession-induced dip in leisure travel.
Stansted’s biggest customer is Ryanair, which runs three out of four flights into and out of the airport, and with whom BAA has a tortured relationship. The low-cost carrier has moved routes elsewhere as airport charges have risen.
BAA’s other airports include Glasgow, Southampton and Aberdeen.
Three years after Ferrovial bought the group in 2006, UK competition authorities found it wielded unfair market power in London and Scotland, and ordered the disposal of Gatwick, Stansted and either Glasgow or Edinburgh airports. – (Copyright The Financial Times Limited 2012)