Manchester circles Virgin’s Gatwick bid
Manchester Airports Group has approached Sir Richard Branson’s Virgin Atlantic about mounting a £2billion joint bid for Gatwick Airport.
Other firms, including infrastructure operators, are likely to join the Virgin consortium as it chases London’s second-biggest airport, set to be sold next year under a break-up of airports operator BAA.
Last month, the Competition Commission said in an interim ruling that BAA might have to sell three of its seven UK airports — two in London and one in Scotland.
BAA has ruled out selling Heathrow, leaving Gatwick and Stansted on the block. The commission publishes its final report in March.
Last week, Virgin Atlantic confirmed it was interested in being part of a consortium to buy Gatwick. The airline would provide customer service expertise and other firms would bring infrastructure experience or finance muscle.
Virgin said it had since been contacted by companies with experience in big development projects worldwide.
Dubai Investment Capital, an investment arm of the cash-rich Gulf emirate, is also believed to be interested in joining Virgin Atlantic in making a bid. Branson recently held talks in Dubai but it is not known if Gatwick was discussed.
Virgin and Manchester Airports Group work together at Manchester. A spokesman for the group said: “We are looking at all of BAA’s assets, both in the South-east and Scotland.”
The airports group is thought to be close to appointing advisers in anticipation of an early auction of Glasgow or Edinburgh. A sale of one of the Scottish airports before the Competition Commission’s final report would give BAA more control over the process and the price it demands.
Glasgow or Edinburgh could fetch between £500million and £1billion each.
BAA has been owned by Spanish infrastructure group Ferrovial since 2006 when it was bought for £10billion in a debt-laden deal.
In its recent report, the Competition Commission said BAA’s near-monopoly of major UK airports had caused standards of service to plunge and breaking it up would be in the public interest.
Business leaders have also warned the decline in service levels at Heathrow could threaten London’s position
as Europe’s leading finance centre.
Potential buyers of any airports offloaded by BAA include Australian financial services group Macquarie, German construction group Hochtief, its compatriot Fraport and Global Infrastructure Partners, a fund manager backed by Credit Suisse and General Electric.