Gatwick's new owners promise improvements

Peter Woodman,Press Association
Wednesday 21 October 2009 15:35 BST

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Britain's second-biggest airport will have new owners within weeks following a £1.51 billion deal announced today.

Gatwick's current operator BAA, heavily criticised for its stewardship of the West Sussex airport, said it had reached an agreement with US-based investment fund Global Infrastructure Partners (GIP).

GIP, which already owns London City Airport which handles around 32 million customers a year, immediately promised passengers improved services.

But environmental groups said they feared the sale could become a green light for a "damaging" expansion at Gatwick. Airlines said they hoped the new owners would work closely with them to improve the travelling experience for passengers.

The Unite union said GIP had to protect airport workers' pay and pensions, while questioned whether the new owners had the sufficient experience and skills to bring about improved services at Gatwick.

There was immediate speculation that GIP would seek planning permission for a second runway at Gatwick - something that is prohibited before 2019 under a long-standing local agreement.

However, a spokesman for GIP said a new runway was an issue for the Government and not for the new owners.

BAA put Gatwick up for sale while the Competition Commission (CC) was inquiring into whether the company's ownership of seven UK airports was anti-competitive.

The CC eventually ruled BAA had to sell Gatwick and Stansted and one of either Glasgow or Edinburgh airports - a decision that BAA is currently appealing against at a competition tribunal.

BAA said today that proceeds from the sale of Gatwick would be used to repay part of its debt which stood at £9.6 billion at the end of June.

BAA chief executive Colin Matthews said the company planned to focus on improving Heathrow and its other airports, which include Southampton and Aberdeen.

Michael McGhee, the GIP partner leading the acquisition, said: "We will upgrade and modernise Gatwick Airport to transform the experience for both business and leisure passengers.

"We plan to work closely with the airlines to improve performance, as we have done successfully at London City Airport."

Although there can be no second runway before 2019 there are plans to expand Gatwick's North Terminal to allow for an extra five million passengers a year.

Brendon Sewill, chairman of the Gatwick Area Conservation Campaign, said: "We are worried that a faceless international consortium will squeeze every pound it can out of the airport rather than addressing local worries."

He added that the new owners must not "ride roughshod" over the local community.

Shadow transport secretary Theresa Villiers said it was vital that GIP improved services at Gatwick, while Liberal Democrat transport spokesman Norman Baker MP said more had to be done to reduce check-in times.

The Campaign for Better Transport said it wanted to see Gatwick become "better, not bigger".

Steve Turner, the Unite union's national officer for civil aviation, said: "We have an agreement in place with BAA which protects the workers' terms and conditions including, importantly, their final salary pension scheme.

"Our concern now is to ensure that this agreement has come through the sale intact."

Airlines said they were looking forward to working with the new owners, with British Airways saying it wanted to see an efficient Gatwick, and Virgin Atlantic Airways pointing out that the airport had suffered from a lack of investment "for years".

Gatwick's managing director Andy Flower said the announcement was "a landmark day for the airport" and everyone associated with it, while John Burroughes, managing director of the Brighton-based Uniglobe Preferred Travel company, said the sale was "excellent news for travellers and for the south-east England economy in general".

Gatwick opened in 1958 and is the busiest single-runway airport in the world, handling 32.2 million passengers in the 12 months ending September 2009.

It serves more than 200 destinations in 90 countries and generates around 23,000 on-airport jobs plus a further 13,000 indirect posts.

The CC report into BAA's airport ownership was particularly scathing of the company, speaking of poor levels of service for airlines and customers.

The sale of Gatwick is subject to EU merger regulation clearance but this is not expected to be a problem.

A GIP spokesman said: "We hope the deal will be completed by early December."

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