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City Airport owner snaps up Gatwick

THE UK&rsquo;s second largest airport, Gatwick, is facing a massive shake-up after BAA yesterday sold it for &pound;1.5bn to City Airport owner Global Infrastructure Partners (GIP).<br /><br />The new owner said that it wants to challenge rival Heathrow by overhauling services and could add new destinations. <br /><br />Michael McGhee, the GIP partner leading the acquisition, said the investment fund would &ldquo;upgrade and modernise Gatwick Airport to transform the experience for both business and leisure passengers&rdquo;.<br /><br />GIP, which also owns 75 per cent of London&rsquo;s City Airport, may also call for a second runway at Gatwick before 2019. the date it must currently wait until before it can build one.<br /><br />Airlines easyJet and Ryanair welcomed the sale but called for a further break-up of BAA&rsquo;s monopoly of UK airports.<br /><br />They also want regulators to impose tough new rules on how the airport should be run..<br /><br />&ldquo;Regardless of who owns Gatwick, it is still a monopoly. Therefore it is vital that Gatwick is properly regulated to protect airline passengers from the new owners exploiting their market power,&rdquo; easyJet said.<br /><br />BAA is under fire from the Competition Commission for its dominance of six UK airports, including Heathrow, Stansted and Glasgow.<br /><br />Meanwhile, the City welcomed the sale as a sign of improvement in the economy.<br /><br />&ldquo;This is good news for the infrastructure market as it shows that sizeable deals with banks can be done even in the current economic environment,&rdquo; Dr Ashley Steel, global chair for transport and infrastructure at KPMG said. <br /><br />The sale of Gatwick, which is subject to approval by the European Union, is due to be completed in December, BAA said.<br /><br /><strong>RYANAIR BOSS MICHAEL O&rsquo;LEARY:<br />SUPPORTS BAA BREAKUP<br /></strong>The sale of Gatwick to GIP has overshadowed the ongoing battle between its previous owner, BAA, which is appealing a Competition Commission ruling at the Competition Appeal Tribunal. <br /><br />The battle between BAA and the Commission &ndash; which has ruled that the airport owner must sell off Gatwick, Stansted and either Edinburgh or Glasgow &ndash; has been rumbling on for around a year.<br /><br />The Commission said last August&nbsp; that Ferrovial, which owns BAA, must shed some of its UK assets to end its dominance of British airports. <br /><br />BAA put Gatwick up for sale in a pre-emptive move to appease the Commission, but talks with bidders stalled as the downturn led to a slump in asset prices. <br /><br />In March, the Commission gave BAA two years to dispose of the airports. But earlier this week, BAAchallenged the decision at the Competition Appeal Tribunal, saying it was "riven" with the appearance of bias, after it emerged that a member of the Commission&rsquo;s original inquiry had advised a consortium looking to bid for Gatwick. <br /><br />Irish carrier Ryanair, led by chief executive Michael O&rsquo;Leary (above) weighed in on the action, backing the Commission&rsquo;s call for a break up of BAA&rsquo;s strong market position. <br />