London City airport owner prepares for sale

GIP wants new chief executive to review exit options, in hope of eventually fetching £1.25bn

The incoming chief executive of the Square Mile's favourite airport, London City, has been told by its owner to review sale options when he starts in the spring.

Declan Collier, who joins from Dublin airport, has been asked by Global Infrastructure Partners (GIP), which also owns Gatwick, to look at a potential sale in his first months in the job. Investment banking advisers could be selected by the end of the year.

This comes at a time of unprecedented upheaval for the airport industry. Edinburgh is up for sale, Stansted could be soon, and the Government is proposing an airport in the Thames estuary.

Other options for London City, which had 7.6 per cent more passengers last year, include syndicating the equity as GIP did for Gatwick in 2010. For example, Abu Dhabi Investment Authority spent £125m for an estimated 15 per cent shareholding and Calpers, the US pension fund, dished out around £105m for a 12.7 per cent stake.

Sources close to GIP said that a banking appointment would leave City, a favourite with business due to its efficiency and proximity to London's financial centres, able to sell quickly when market conditions improve.

At present, the airport would struggle to fetch much more than the £742m that GIP – then in conjunction with AIG – paid in 2006, despite significant operational improvements. In a buoyant market, GIP and the current minority stake partner Highstar Capital could expect as much as £1.25bn.

If Mr Collier recommends a sale, it is unlikely to take place until late next year when GIP can profit on its investment. A source said: "Timing is the only thing that matters. There are different ways of exiting – GIP looks at what happened with Gatwick and selling slices as a successful model."

Mr Collier replaces Richard Gooding, who will stay on as a non-executive director at the airport. Mr Gooding declined to comment on the potential sale.

Although GIP seems set to, at least, sell down some of its stake in London City, the US-based infrastructure group is believed to be interested in buying Edinburgh airport. The deadline for initial bids on Edinburgh is next month and Royal Bank of Scotland is believed to be advising GIP on its potential offer.

Edinburgh is expected to fetch in excess of £600m, though the price might be slightly depressed as it is a forced sale. The airports operator BAA has been ordered by the Competition Commission (CC) to sell-off Edinburgh, as it is considered to have a near-monopoly in Scotland, just as it was at Gatwick.

BAA, which is owned by the Spanish group Ferrovial, is still fighting the CC's ruling that it should also sell off Stansted. The CC argued that by owning Heathrow and Stansted, as well Gatwick until 2009, BAA was too dominant in the South-east.

However BAA believes that Heathrow and Stansted serve different markets, the former focusing on business and the latter leisure.

The future of UK airport infrastructure was a major talking point last week, after it emerged that the Government would be consulting on the possibility of building a new airport in the Thames Estuary. This is a plan for which London Mayor Boris Johnson has lobbied hard and which would negate the need to expand at Heathrow.

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
News
ebooksNow available in paperback
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
tech
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum