Page last updated at 07:54 GMT, Monday, 5 May 2008 08:54 UK

UK group states Gatwick interest

Passengers at Gatwick Airport
BAA may be forced to sell Gatwick in the interests of passengers.

Manchester Airports Group (MAG), the biggest UK-owned airports operator, is interested in buying Gatwick Airport, the BBC has learned.

MAG's chief executive told BBC News it would consider buying the airport if current owner BAA was forced to sell.

The Competition Commission is concerned that BAA's ownership of London's three biggest airports may not be in the public interest.

It may decide in August to break up Spanish-owned BAA.

"We'd be interested in any assets that come up, on the premise that we feel we could improve the performance of the group on the back of it, at a price that was sensible," MAG chief executive Geoff Muirhead told Radio 4's Today programme.

Price tag

BAA currently runs Gatwick, Heathrow and Stansted airports near London.

Last month the Competition Commission said BAA "dominates the airports markets in the South East of England and in lowland Scotland".

Entrance to Bournemouth Airport
Manchester, East Midlands, Bournemouth and Humberside

Gatwick is seen as the most likely candidate for sale, and industry experts have put the price-tag in the region of 2bn.

Mr Muirhead acknowledged the challenge of funding such a purchase in the current economic climate, but said: "I think the price might reflect the difficulties in the financial markets at the moment, in terms of leveraging these types of acquisitions."

MAG currently owns Manchester, East Midlands, Bournemouth and Humberside airports, and is the largest operator in the country after BAA.

The group, privately owned by ten borough councils, handled 28 million passengers last year, with the vast majority travelling through Manchester.

However, the outlook for regional airports was called into question following MAG's decision in mid-April to sell a majority stake in Humberside.

Mr Muirhead said the decision was based on restricted growth opportunities, but that the airport remained profitable.

He also criticised British Airways' decision to cancel daily flights between Manchester and New York from October:

"Yes it was a blow, BA unfortunately don't seem able or willing to serve the rest of the UK, they only seem to be interested in the South East."

Passenger boost

Problems at Heathrow's newly-opened Terminal 5 have been beneficial to the group.

Although passenger numbers from Manchester to Heathrow fell by 19% last month, those to other European hubs more than offset the decline.

And retail sales in its terminals have increased by 10% since T5's opening, as a result of higher volumes of international-bound passengers preferring to spend pounds rather than euros.

Another boost to the airport will be thousands of Manchester United fans travelling to the European Champions League final on 21 May.

Asked about fears over security, Mr Muirhead said handling the huge volumes of fans "will be relatively easy".

UK to review how airports are run
22 Apr 08 |  Business
BAA airport ownership criticised
22 Apr 08 |  Business

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