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BAA Lands GBP 1.2bn Deal for 75 Per Cent of Budapest Airport

Posted on: Monday, 19 December 2005, 06:00 CST

By Nick Bevens

BAA is to take over the running of Budapest airport after triumphing in Hungary's largest privatisation.

The owner of Glasgow, Edinburgh and Heathrow airports made a GBP 1.2 billion offer to buy a 75 per cent stake in Ferihegy airport, which the Hungary government is privatising.

BAA will assume responsibility for the airport - one of the fastest growing in Europe - on Friday.

"Budapest plays to all BAA's strongest attributes - it is a growing airport where our development, retail and property skills can all contribute. For us it is a perfect fit," said BAA chief executive Mike Clasper.

Almost seven million passengers used Budapest airport in the past ten months, 27 per cent higher than over the same period last year. Budget airlines have flocked to the airport since Hungary joined the EU in May 2004.

The deal is the biggest illustration yet of BAA's strategy to invest abroad, where regulatory conditions are often more favourable and it can make more money for shareholders. As well as its seven UK airports, BAA has a 65 per cent stake in Naples airport and smaller holdings in a number of Australian airports, including 20 per cent of Melbourne.

It also has retail and airport-managing contracts with four American airports, as well as owning Glasgow, Edinburgh, Aberdeen and Southampton airports.

BAA is attracted by Budapest Airport's large land bank and the scope for development - it is as big geographically as Heathrow but carries far fewer passengers. It would also help BAA cash in on the trend among low-fares airlines to set up routes to eastern Europe following the expansion of the EU.

Source: Scotsman, The

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