EasyJet talks may hold key to TBI future

Negotiations over passenger and baggage charges, expected to resume today between airports operator TBI and low cost airline EasyJet, could be crucial to deciding the airport group's future, warned industry analysts.

TBI is the subject of a hostile £516 million sterling (€818 million) takeover bid from the French construction group, Vinci.

The British airports operator, owner of Belfast International Airport, has rejected the bid as "opportunistic" but the outcome of its discussions with EasyJet could be the decisive factor in whether the bid remains on the table.

In its formal offer document for TBI published last weekend, Vinci says its bid hinges on TBI securing an agreement with EasyJet over charges at Luton Airport "no less favourable" than its current arrangements. TBI charges EasyJet £5.50 per passenger and a 50p baggage-handling fee at Luton. Both parties have a Friday deadline to agree to a new arrangement at Luton Airport.

EasyJet chairman Mr Stelios Haji-Ioannou has said he wants the charges lowered but up to the emergence of Vinci, TBI had not appeared inclined to agree to his wishes.

Industry analysts say one way for TBI to dismiss Vinci would be to agree to lower charges for EasyJet but this could also undermine the group's business in the medium term.

Vinci has bid 90p sterling a share for TBI, the offer values the airports group at a 50.6 per cent premium to the group's closing price on August 13th, the last business day before the French group's expression of interest.

TBI's share price at the latest market close was 98.50p per share and city analysts believe a fair price for TBI is closer to 100p per share.

But in its offer document Vinci claimed that its 90p per share cash bid offered shareholders some certainty over what it criticised as TBI management's "record of disappointments".