BAA has initiated appeal proceedings against the Competition Appeal Tribunal’s judgement that it must sell London-Stansted Airport.
The acquisition of 38% of TAV Airports Holding by Aéroports de Paris Management – which was announced on 11 March – proves that investment in European airports is by no means at a standstill. The investment by the wholly owned subsidiary of Aéroports de Paris (AdP) totals $874 million (€666 million) and values TAV Airports Holding’s equity at $2.3 billion (€1.75 billion). The partnership will see the creation of an alliance that will manage 37 airports, which account for as many as 180 million annual passengers.
Pierre Graff, Chairman and CEO, AdP, said: “The partnership with TAV is a major strategic investment for Aéroports de Paris group. Fully in line with our international strategy, this transaction will have a strong positive impact on the group’s performance. This combination will become a leading worldwide airport operator group, with a long lasting growth perspective.”
He continued: “Not only the geographic proximity but also the cultural and business model proximity of both companies will ease future development plans, in particular in new airports investment opportunities.”
Aena postpones concession process
The privatisation of the management of Barcelona El Prat and Madrid-Barajas airports on a concession basis has been postponed by the Spanish government.
While the TAV Airports Holding/AdP partnership highlights the positivity that does exist in terms of airport investment, the Aena case study probably best highlights the impact that the financial uncertainty is having in general. When the new Aena Aeropuertos S.A, division became operational in June last year, its remit was to begin a process of market sounding to look for institutional investors, with the privatisation of the management of Madrid-Barajas and Barcelona El Prat airports on a concession basis identified as a suitable way to raise revenue.
Since then, however, the concession process has been reversed. The Spanish government has publicly announced that the priority is to reinforce Aena Aeropuertos’ network position as a whole, and both airports are essential assets of this network.
The government is now analysing the best way to optimise Aena Aeropuertos’ position to establish its future management model. Although the creation of Aena Aeropuertos and the modernisation of the management structure are still expected to increase the overall value of the company, this is now part of a longer-term strategy.
BAA appeals London-Stansted sale
Meanwhile, BAA has announced that it has initiated appeal proceedings against the Competition Appeal Tribunal’s judgement, which found in favour of the Competition Commission’s decision that required the airport operator to sell London-Stansted Airport. The initial decision also outlined a requirement for BAA to sell off either Edinburgh or Glasgow airport. BAA opted to sell Edinburgh, but pushed back on the London-Stansted decision, stating that: “BAA believes that the judgement is flawed and is seeking to appeal.”
The sale of the two airports relates to the ruling that “passengers and airlines would still benefit from greater competition”. However, this is something that has been strongly refuted by BAA.
Colin Matthews, BAA’s Chief Executive, said: “We believe the south east airports market has changed and BAA has changed since the Competition Commission’s 2009 decision. It is also clearer now than it has ever been that Heathrow and Stansted serve different markets.”
So, as the sale process for Edinburgh Airport gets underway, BAA’s battle against the sale of London-Stansted shows no signs of subsiding.
