Branson to bid as BAA puts Gatwick Airport up for sale at £2billion

Sir Richard Branson's Virgin Atlantic said it was interested in bidding as part of a consortium and many leading airport operators are likely to join the auction.

Last month the Competition Commission ordered BAA to sell Heathrow, Gatwick or Stansted.

For sale: Gatwick Airport

A damning report said BAA's near monopoly of airports in the South-East had led to poor passenger service and a failure to invest in airport facilities.

BAA said the search for a buyer would begin immediately.

Chief executive Colin Matthews said: 'Gatwick has long been an important and valuable part of BAA and the decision to sell was not taken lightly. We believe the airport's customers, staff and business will benefit from the earliest possible resolution of current uncertainty.'

Last year Gatwick, which celebrated its 50th birthday in June, was ranked 75th out of 101 major airports for overall passenger experience.

BAA, owned by Spanish construction giant Ferrovial, decided to get rid of Gatwick rather than Stansted because it is applying for a second runway at the Essex airport and feared a sale would jeopardise the planning process.

Potential buyer: Sir Richard Branson's Virgin Atlantic said today it would be making an offer for the airport

Gatwick, the world's busiest single-runway airport, has an agreement with West Sussex County Council not to build a second runway before 2019. It is valued at £1.7 billion by air industry regulator the Civil Aviation Authority and is on course to make a profit of £184million this year.

Estimates of its worth in the open market have ranged from less than £2billion to more than £3billion.

Analysts said the lower end of the range was more realistic because of the difficulty of raising money in the financial markets. As well as the Virgin consortium, likely bidders include Abu Dhabi investment group Mubadala Development Company, German construction group Hochtief, Manchester Airport Group and Frankfurt airport's operator Fraport.

Virgin Atlantic chief executive Steve Ridgeway said: 'We are delighted that BAA has ended the uncertainty over Gatwick's future. Virgin Atlantic would relish the opportunity to bid for Gatwick as part of a consortium so we can inject our customer service expertise into the running of the airport.

Shambles: Crowds of passengers jostle in the check-in area of Gatwick's south terminal

The Queen opens the North Terminal in 1988

'Gatwick doesn't just need a new owner. It needs a much tougher regulatory-system which ensures any new owner does not become BAA mark II.'

Analysts said it was important that Gatwick is bought by a serious operator with a long-term commitment to the airport and 'not just an investment fund using fancy financing to make a turn'.

The sale decision was condemned by unions. Steve Turner of Unite, which represents airport workers, said: 'It beggars belief that a "For Sale" sign can be hung across the country's second largest airport. Gatwick is an essential part of the UK's aviation sector yet it is to be flogged off with little care for the wider social impact.

'This is devastating news to the many hundreds of professional, loyal and dedicated staff at Gatwick and it will hit passengers too.

'At a time when the sector is being battered by the credit crunch, faces tough challenges in soaring fuel prices and new security measures, aviation needs stability, not the fire sale of a profitable, significant airport.'