Teachers’ pension fund wins £2bn race for London City Airport

Irish-linked hub changes hands for third time in 10 years

A consortium led by a Canadian pension fund has won the £2 billion (€2.5bn) race to buy London City Airport, according to reports on Thursday.

The airport, led by Irish chief executive, Declan Collier, has been on the market since last August, when current owner, Global Infrastructure Partners, put it up for sale.

A partnership led by Ontario Teachers Pension Fund and including Borealis Infrastructure has emerged as the winner in the race after final round bids were submitted in recent days.

China’s HNA Group, owner of Bohai Leasing, which last month completed its purchase of Irish aircraft financier, Avolon, was named as one of the winning consortium’s rival bidders.

The airport, located a little more than 10km from the British capital’s financial district, has changed hands several times in the last decade.

Irish background

In 2006, Global Infrastructure Partners paid £750 million to buy it from Irish businessman Dermot Desmond, who bought it for £23.5 million from British builder, Mowlem in 1995.

Irish airline, Cityjet, is one of the airport's biggest customers, operating services to their from Dublin, Cork and cities in western Europe.

Its new owner faces a potential battle with another Irishman, Willie Walsh, chief executive of International Airlines' Group (IAG), owner of Aer Lingus and another big London City customer, British Airways.

Mr Walsh told the Financial Times last month that the £2 billion price tag for the airport was "foolish" while British Airways has threatened to pull out of there should the new owner raise charges.

Additional reporting: Copyright The Financial Times Limited 2016

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas