Stansted considered a prize asset now it is finally being sold

 
David Hellier
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THERE are more than a handful of less than busy investment bankers celebrating the decision yesterday by Spanish group Ferrovial that it will sell Stansted Airport. The group is finally doing so after three years of wrangling with the competition authorities.

The Spaniards have been trying long and hard to avoid a sale, even threatening last month to appeal against a Court of Appeal ruling. But yesterday the owners of BAA snapped and gave up the fight.

It is an unwilling seller, having already been forced to sell both Gatwick and Edinburgh airports in response to a Competition Commission (CC) report in 2009 into its ownership of seven airports in total in the UK.

The CC felt this was an uncompetitive arrangement and that the UK’s airport industry would benefit from more varied ownership.

BAA has long argued that Stansted serves a distinct market from Heathrow and therefore that its ownership of both airports could hardly be deemed anti-competitive.

Essentially Stansted, which has been losing passengers from a peak of around 24m a year to under 18m, is served mainly by two low-cost airlines, easyJet and Ryanair, whereas Heathrow is a hub served by a variety of airlines, including major long-haul carriers.

It seems unlikely that Stansted could ever become a major hub because long-haul operators prefer to be where the most passengers are.

But new ownership has arguably given Gatwick the freedom to market itself for services in all sectors, including long-haul.

For example it has attracted the new Asian-based airlines such as Air China, Korean Air and Vietnam Airlines to give passengers flying from Gatwick more destinations to choose from.

BAA sources say there are countless slots up for grabs at under-utilised Stansted – for free – but airlines are reluctant to give their slots up at Heathrow under any circumstances.

Whatever the rights and wrongs of the competition argument, Stansted is seen as a very saleable asset, with analysts estimating it could fetch around £1bn or so.

A number of groups are believed to be interested, including the council-controlled Manchester Airports Group, which is in discussions with a financial buyer over selling a stake.

Also said to be monitoring the situation are South Korea’s Incheon and Ryanair, which has said it might take a stake but in reality might support a new owner with some guaranteed contracts for a couple of years or so in return for some favours on landing charges.

Manchester Airports Group is probably the early favourite given that it is pursuing two key recommendations: one to explore the opportunity to add a quality airport to the group and the other, to bring in new equity investment as part of the deal.

SFO GETS A MUCH NEEDED BOOST
THE SERIOUS Fraud Office (SFO) will be especially relieved at getting a result in the long-delayed trial of Asil Nadir, the tycoon who fled the country to go to northern Cyprus in May 1993. Nadir’s 17-year exile was a major embarrassment for the SFO, which was powerless to seek his return. There were then fears the jury might not understand fully some of the complex accounting issues presented to them by the prosecution.

Success may not be enough to fully revive the body, though, says Stephen Parkinson of Kinglsey Napley. Fears the SFO might be folded into the National Crime Agency and budget cuts have badly affected morale.