BAA plans to challenge a Competition Commission order to sell two of its airport with an application to the Competition Appeal Tribunal (CAT) (Reuters, 27-Jul-2011). The commission order BAA to sell London Stansted and either Glasgow or Edinburgh airports. “The natural place for us to appeal (against) the ruling would be at the CAT and we have until September 19 to do that,” BAA CEO Colin Matthews said. “We won’t wait until the last minute but we have some more work to do to scrutinize the report in more detail but as soon as we’re done we’ll get on with it.” Mr Matthews refused to rule out taking the matter to the Court of Human Rights if a judicial review fails. Analysts expect BAA will only be able to sell Stansted at a substantial discount to its GBP1.32 billion regulated value.
BAA may appeal against asset sale order
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Private investment in airport infrastructure is popular again: the growing importance of the PPP
Privatisation of airports, or at the very least their corporatisation into independent business units that behave along business lines, has again become fashionable. This follows a dip in transactions and prices during the period of the global financial downturn from 2008-2012. Money is now easier to obtain and air transport infrastructure is popular with investors as it typically has a long term cycle attached to it, usually quite the opposite of the airlines that use it.
For now at least traffic figures are rising and airport EBITDAs with them, along with the earnings multiples when they are sold. What is more, the activity is across the board - in PPPs, BOTs, trade sales, even IPOs.
Meanwhile, for the airlines, this is the first time for decades that they are not caught up in a fight for survival. And on the other side, many countries are facing low levels of economic growth where infrastructure funding, while vital, is not possible out of the public purse.