London City Airport put up for sale

London City Airport has been put up for sale with its owners reportedly hoping to attract a price tag of up to £2bn on the fast-growing airport.

It is majority owned by US investment fund Global Infrastructure Partners (GIP), which has appointed advisers to work on a deal for the airport, according to the Financial Times.

London City has seen passenger numbers more than double from 2m in 2005 to an expected 4.1m this year. Michael McGhee, GIP director for transport, told the FT market conditions were favourable for a sale. He said: “The market demand for quality airports is very high.”

GIP also holds stakes in Gatwick and Edinburgh airports, but the investment firm added it has no plans to sell its stakes in these firms.

It bought the airport from Irish businessman Dermot Desmond in 2006 for £750m.

London City is based in the Royal Docks in Newham, and is heavily used by corporate executives who have their offices a few miles away in the City and Canary Wharf. It also has a private jet centre, where passengers can pass through the building in just a few minutes.

The airport is battling for planning permission for a £200m expansion that would add seven new aircraft stands and help boost its passenger numbers to 6m by 2023.

It would also help open up the airport to new destinations, such as the Gulf, the Middle East, Russia, North Africa and the US east coast.

These plans were passed by Newham Council in February, but blocked by London mayor Boris Johnson the following month due to noise concerns. The airport appealed against the mayor’s veto last month and expects a decision towards the end of next year.

It was granted permission to increase its flight movements from 70,000 a year to 120,000 annually in 2009.

GIP owns 75% of London City, with US buyout firm Oaktree Capital owning the rest, but both have reportedly agreed to the sale.