Page last updated at 10:53 GMT, Wednesday, 17 September 2008 11:53 UK

Gatwick Airport put up for sale

BAA's Chief Executive, Colin Matthews on the sale of Gatwick airport

The UK's second-largest airport, Gatwick, has been put up for sale by its owner BAA.

The move comes four weeks after the Competition Commission said BAA may have to sell three of its UK airports because of market dominance concerns.

Several firms are said to be interested in buying Gatwick, which has been valued at £1.8bn by regulators.

Potential bidders include Australian company Macquarie, Germany's Fraport, and the owners of Manchester airport.

Virgin Atlantic said it would also be interested in bidding as part of a consortium.

"We are delighted that BAA has ended the uncertainty over Gatwick's future," said Steve Ridgway, Virgin Atlantic chief executive.

"Virgin Atlantic would relish the opportunity to bid for Gatwick as part of a consortium and inject our customer service expertise into any future running of the airport."

However there were misgivings at the Unite trade union, whose national officer, Steve Turner, said: "It simply beggars belief that a 'For Sale' sign can be hung across the country's second largest airport.

"Gatwick is a core component of the national infrastructure and an essential part of the UK's aviation sector, yet it is to be flogged off with little care for the wider social impact."

Sale process begins

Last month, the Competition Commission said in an interim ruling that BAA may have to sell three of its seven UK airports.

Passengers at Gatwick Airport
Heathrow: 67.8 million
Gatwick: 35.1 million
Stansted: 23.7 million
Edinburgh: 9.0 million
Glasgow: 8.7 million
Aberdeen: 3.4 million
Southampton: 1.9 million
Source: BAA

Although the commission does not release its full report until next year, it added that BAA may need to sell two of its three airports in the South East - Heathrow, Gatwick and Stansted

BAA, which is owned by Ferrovial of Spain, ruled out selling Heathrow, which leaves Gatwick and Stansted.

The company also operates airports at Edinburgh, Glasgow and Aberdeen in Scotland, and Southampton in southern England.

In a statement, BAA said it had decided to begin the process of selling Gatwick "immediately".

The Civil Aviation Authority has just increased the amount Gatwick - where 35 million passengers passed through in 2007 - can charge in landing fees.

But it is operating on one runway and approaching full capacity.

'Current uncertainty'

"Gatwick has long been an important and valuable part of BAA and the decision to sell was not taken lightly," said BAA chief executive Colin Matthews.

"We believe that the airport's customers, staff and business will benefit from the earliest possible resolution of current uncertainty.

Aer Lingus
Thomas Cook
First Choice
Delta Airlines
US Airways
Virgin Atlantic
Continental Airlines

"When the Competition Commission published its provisional findings, we said that we would be realistic in our response, though we disagree with the commission's report and the analysis on which it is founded."

Mr Matthews told the BBC that the market would set the price that the airport would realise.

He also told the BBC that selling the airport was "the right thing for BAA, for Gatwick, to do".

Following BAA's announcement, the Competition Commission issued a statement saying that it had provisionally found competition problems at each of BAA's seven UK airports, with adverse consequences for passengers and airlines.

"As a result we are now consulting on the appropriate remedies set out in our remedies notice," it said.

"If these are implemented as proposed, we will require BAA to sell two of its three London airports, and also either Edinburgh or Glasgow airport."

'Monopolistic grip'

The commission said its investigation was continuing and its final report would be published in early 2009 - focussing on both the competition issues and the appropriate remedies.

"We will, of course, take account of any action by BAA in the meantime which may impact the competition problems we have provisionally identified," it added.

Meanwhile the Conservative party said it welcomed the BAA decision to sell Gatwick.

Shadow Transport Secretary Theresa Villiers said: “For over a year, we've been calling for BAA's monopolistic grip on airports around London to be broken up so we welcome steps to sell Gatwick.

"We will continue to keep the pressure on BAA to ensure it dramatically improves the quality of service it gives customers which may mean Stansted should be sold as well.”

Budget airline Easyjet said Gatwick was a "local monopoly" and called on any reform of airport regulation to "put the needs of customers first".

And sector rival Ryanair said: "This morning's announcement... is just the latest attempt by the BAA monopoly to get itself off the hook of the Competition Commission's recommendations."

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Budapest Business Journal BAA puts London Gatwick airport up for sale - 3 hrs ago
China Post BAA puts London Gatwick Airport for sale - 5 hrs ago
Leigh Journal Bidding war expected for airport - 8 hrs ago
Telegraph Gatwick for sale as BAA fends off Commission - 9 hrs ago
The Independent 'Pragmatic' BAA puts for sale sign on Gatwick, but hopes to keep Stansted - 11 hrs ago

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