Progress report on AdP privatisation - Management intends to “overtake” BAA
SYDNEY (Centre for Asia Pacific Aviation) - The French Government plans to release the terms and details of the proposed partial privatisation of Aeroports de Paris (AdP), by the end of 2005. Further details were not disclosed at this stage. The Government also appointed Credit Agricole’s Calyon Corporate and Investment Bank and Morgan Stanley to advise on the IPO. The partial privatisation may take place as early as Nov-05, but early 2006 seems more realistic, although the successful part-privatisation of two state companies – Electricité and Gaz de France – has given it fresh impetus.
Airport Investor Monthly has previously indicated that the government’s priority is to head off a pensions crisis in the public sector and that this may be the essential reason for the sale, to help raise cash to be used in that direction. However, AdP management, unconcerned with such matters, is confident that, with the aid of whatever cash injection it can gain out of this, will acquire the financial authority to increase its presence in France (where ten regional airports may now also be privatised), acquire airports outside the country and challenge BAA plc’s position as the leading European terminal operator.
The plan would be to transform airports into shopping malls and their environs into business parks; applying the same model that BAA has used beneficially. AdP itself still relies on landing fees for 33% of its income and its property division is underweight for a company of its size.
Intriguingly, AdP’s newly found aggression has caused alarm bells to ring in Scotland, where Glasgow Prestwick Airport is viewed in some quarters as a primary target for AdP. Prestwick has changed hands between Stagecoach, Omniport and Infratil in the past five years during which time passenger numbers have grown dramatically, fuelled by Ryanair’s decision to make it a base. Nevertheless, the retail potential has only been improved cosmetically and Prestwick has not yet come anywhere near achieving its status of the 1970s as a transatlantic gateway airport, used by British Airways, Northwest Orient as it then was, and others.
Analysis on global airport privatisations can be found in the Centre's Airport Investor Monthly