US consortium to buy London city airport

An American consortium is to buy a thriving UK city airport which will play a key part in the 2012 Olympics, it was announced today.

Led by insurance company AIG, the consortium is acquiring London City Airport which is in London’s Docklands not far from the site of the Olympics in Stratford, east London.

London City was not disclosing the value of the deal today but it is thought it could be in the region of £750m (€1.1bn).

This would represent a huge profit for the airport’s current owner, Irishman Dermot Desmond, who bought the airport for just £23.5m (€34.8mn) in 1995.

London City said today that the sale process had attracted “significant worldwide interest”.

A spokesman for the airport added: “London City Airport understands that its new owners plan to work closely with the existing airport management team to maximise the development and future value of the airport.

“This transaction remains subject to EU merger clearance and is expected to close in November 2006.”

London City, which opened in 1987, handled nearly two million passengers last year. The airport offers flights to 25 European destinations from 15 airlines.

Transport links to the airport had proved difficult until recent months when an extension of the Docklands Light Railway enabled passengers to travel to a new London City Airport light railway station.