BAA expect bidding war for Gatwick airport

Airport operator BAA put the For Sale sign up over Gatwick airport today in a move likely to spark a lively bidding war.

Airport operator BAA put the For Sale sign up over Gatwick airport today in a move likely to spark a lively bidding war.

Almost as soon as the Spanish-owned company announced it was selling the West Sussex airport, Richard Branson’s airline Virgin Atlantic said it relished the chance to run it.

Manchester Airport Group, which operates four UK airports also said it was keen to take over Gatwick, while German company Hochtief is among a number of overseas businesses also interested in any sale of Gatwick.

The BAA move follows a damning report last month from the Competition Commission (CC) which spoke of poor levels of service for airlines and passengers and proposed that BAA should give up running two of its three London airports.

BAA chief executive Colin Matthews said the decision to sell Gatwick – used by 35 million passengers a year – was not taken lightly.

He added that the company wanted to continue to operate its two other London airports – Heathrow and Stansted – as well as its other south east England airport, Southampton.

Virgin Atlantic chief executive Steve Ridgway said he was delighted BAA had ended the uncertainty over Gatwick, adding that his airline would “relish the opportunity to bid for Gatwick as part of a consortium and inject our customer service expertise into any future running of the airport”.

Steve Turner, national officer of the Unite trade union, said it simply “beggared belief” that Gatwick was being put up for sale and that the news was “devastating” to Gatwick staff and would also hit passengers.

The Conservatives welcomed the sale as did airlines, including one of BAA’s staunchest critics – Ryanair.

Mr Matthews said it was likely to take months to complete any sale. He added that everyone would benefit from the earliest possible resolution of the matter.

BAA is owned by Spanish giant Ferrovial, which bought the firm in 2006.

It has faced mounting criticism over the last few years – a time in which the company has struggled to cope with rising passenger numbers, extra security procedures and the shambolic opening of Heathrow’s Terminal 5.

Analysts have estimated that the sale of Gatwick could fetch between £2bn (€2.5bn) and £3bn (€3.7bn).

Gatwick is the busiest single-runway airport in the world, hosting 80 airlines and managing 262,000 air transport movements per year. It employs more than 25,000 people, around 2,400 of whom work for BAA.

In its stinging criticism last month, the Competition Commission said separate owners of the main London and Scottish airports would do a better job than BAA.

The commission also highlighted a lack of responsiveness by BAA to the needs of its airline customers, a lack of initiative in planning capacity, investment not tailored to the requirements of airport users, and lower levels and quality of service for both airlines and passengers.

Shadow transport secretary Theresa Villiers said she welcomed the sale news, but the GMB union the Government should take a slice of the airport, while Ryanair boss Michael O’Leary said the sale was just an attempt by BAA “to get itself off the hook of the CC’s recommendations”.

The CC said BAA had undertaken to keep the commission informed of its plans and to work constructively with the CC.

The commission added that its investigation into BAA’s ownership of UK airports continued and that it planned to publish a final report in the early part of next year.

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