September 18, 2008

Airlines Cheering the Sale of Gatwick

AIRPORT operator BAA has put the For Sale sign up over Gatwick airport 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, Sir 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 interested.

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 Pounds 2bn and Pounds 3bn.

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

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