BAA announces sale of London Gatwick airport

Airport operator BAA yesterday announced the sale of Gatwick, Britain's second busiest hub, to US investment fund Global Infrastructure Partners for £1.51 billion (€1.6 billion).

"BAA today announces that it has agreed to sell its 100 per cent interest in Gatwick Airport Limited to an entity controlled by Global Infrastructure Partners for £1.51 billion," the operator said in a statement.

British competition authorities last year called on BAA to sell three of its seven airports in Britain - two in London and one in Scotland - to end a dominance they said hurts passengers and airlines financially.

A consortium led by Spanish construction group Ferrovial bought BAA in 2006 for £10.23 billion.

BAA said proceeds from the Gatwick sale, due for completion in December subject to EU regulatory approval, would be used mainly to pay off group debt.

"Of the sale price, £55 million is conditional on future traffic performance and the buyer's future capital structure," it added.

BAA said that following the sale, it would focus on improving Britain's biggest airport, London's Heathrow, as well as its other hubs.

"BAA is changing and today's announcement marks a new beginning for both Gatwick and BAA. We wish Gatwick well for the future and are confident that the airport will flourish under new ownership," said BAA chief executive officer Colin Matthews.

The airport operator had until October to sell Gatwick in order to satisfy Britain's Competition Commission.

The CC has also ordered it to sell Stansted airport, northeast of London, followed by either Edinburgh or Glasgow.

BAA in May launched an appeal on grounds of "bias" against the order that it must sell another London airport and one in Scotland by early 2011.

According to recent CC data, BAA holds a 60 per cent market share of all passengers passing through British airports. The figure climbs to 90 per cent around London.

BAA, which was privatised in 1987, also operates Southampton airport in southwest England and Aberdeen airport in Scotland.

Global Infrastructure Partners describes itself as an independent fund that invests in infrastructure assets worldwide.