THE BIRMINGHAM POST: Airport Caution

The sale by Aer Rianta and the Macquarie group of a 48.25 per cent stake in Birmingham International Airport would appear, on the face of it, to deliver guarantees about future operation and investment demanded by the seven West Midlands district councils.

If the prospective pounds 420 million purchase by the Ontario Teachers’ Pension Plan and Victorian Funds Management goes ahead, the airport’s private sector ownership will pass to institutions used to working with the public sector who are more concerned with steady growth than rationalising the assets in the hope of quick returns.

OTPP senior management has been unusually open about its commitment to major investment at BIA, including an intention to deliver the much-needed runway extension, a new terminal and an international pier. Specific promises at this stage, of a long-term relationship and substantial investment, even before the deal has been signed are unequivocal and will no doubt be greeted with enthusiasm by the councils.

It is right, however, that the chief executive of the Birmingham Chamber of Commerce should urge caution. Aer Rianta and Macquarie are selling their stake because, presumably, they do not think they can make enough profit from the expansion of the airport. The new owners can afford to take a longer view, but will nevertheless have to quickly come up with investment for runway extension in excess of pounds 120 millions.

The region’s council leaders must be certain that promises of a bright future are deliverable before the sale is approved.

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