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Branson to bid as Gatwick is put up for sale at £2 billion
Jonathan Prynn, Consumer Affairs Editor17.09.08
Gatwick airport was put up for sale today for an estimated £2 billion.
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.
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.
BAAsaid 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.
Gatwick, the world's busiest singlerunway 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.
"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."
FROM RACE COURSE TO 35 MILLION PASSENGERS A YEAR
* Gatwick received its first airfield licence in August 1930, with pleasure flights operated by the Surrey Aero Club.
* Then situated on a race course, Gatwick had hosted a substitute for the Aintree Grand National run over three years from 1916 to 1918
* In 1934, the Air Ministry issues Gatwick with its first public licence allowing the airport to be used by commercial aircraft. It is requisitioned by the Air Ministry for use by the RAF during the Second World war
* 1956 Gatwick is closed and then rebuilt over the next two years at a cost of £7.8m as an alternative to Heathrow
* The Queen officially opens the new Gatwick airport on 9 June 1958. The first airline to use the airport is Transair. In its first full year of operation 368,000 passengers use the airport
* By 1968, passenger numbers exceed 2 million for the first time
* The single runway is extended in 1973 to 3,098 metres and later to its present length of 3,316 metres
* In 1984, the Gatwick Express is launching, running a non-stop service from London Victoria in just 30 minutes
* The Queen opens the new, £200m north terminal in 1988, a year after BAA is floated on the Stock Exchange
* Nowadays more than 35 million passengers use Gatwick each year, making it the world's busiest single runway airport. It is used by 80 airlines and flies to more than 220 destinations
Reader views (11)
What are the unions carping on about? Its not like the buyer will stuff the airport in his pocket and walk away with it after all! Sounds like they know they're onto a good thing in a busy airport and don't want THEIR applecart upset.
- Rogan, DFW TX
Gatwick is a mess and handing it over to Virgin sounds promising compared to BAA's laclustre investment. What have BAA actually invested in Gatwick?
- Christian, london
Branson needs to sort out his woeful Virgin Media before he puts his fingers into any more pies.
Dismal customer service and technology that fails regularly does not bode well for the Gatwick experience.
- Sedley B, Harrow, UK
I fly Virgin at least once per month, the service is excellent, I certainly think Branson will bring a much needed level of customer care to the airport!
- Expert X, London
As long as Ryanair don't buy it I don't care.....
- Mark, St Albans, UK
If my recent experience of flying with Virgin is anything to go by, it would be a disaster if Virgin were to run Gatwick. Check in was chaotic and we just made it onto the flight: the Virgin staff were off hand, unsympathetic and unhelpful. Coming back was no better with the 'one hour touch down' taking over two hours due to further Virgin check in chaos: passengers had queued for over 5 hours without any queues for BA. This was made worse by no air conditioning and the stewards having to be asked repeatedly for water.
- Judith, London
Virgin running an airport as well as an airline - I think not! Whereas Richard Branson used to impress me the lustre has faded in recent years as he morphs into a Grumpy Old Man. Witness the continual attacks on BA.
- Michael, London
Nice one Sue - Gatwick isn't actually currently in British hands dear, the Spanish bought it years ago! (Ferrovial) With those enlightened and informed views you hold, you must be a Daily Mail reader eh?
- R Branson, Necker
Well, what Branson wants Branson gets.
You might as well change the label now to Virgin Gatwick.
But who blames him, Heathrow is a mess, its a mess to get there, to be there and to leave there.
So it now looks like we will have three terminals at Gatwick, a North, a South, and a Virgin.
- Mr.S.Port, London
I can imagine if Richard Branson got Gatwick, prices would suddenly go through the roof for BA!
- Marianne, S W France
So much of this country is foreign owned now. God help us all if some international disaster befell us if we fell out with other nations. We'd all be dead within a fortnight, no oil, no food, no utilities. We're far too reliant on other countries who seem to own almost everything these days. We should be more self-sufficient. (Why worry about global warming, no other countries give a damn, except for this tiny speck of an Island, which is going to make no impact whatsoever in the scheme of things). I just hope Gatwick stays in British hands, come on Sir Richard Branson make a good bid!
- Sue, Orpington, Kent
