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Lyon and Nice airport privatisations – lessons to be learned from the events at Toulouse

The recent privatisation of France’s Toulouse Blagnac Airport reignited interest in French provincial airports. Despite a longstanding intention to partially privatise a number of the bigger ones a series of economic and political events had thwarted that intent.

When the Toulouse deal was eventually completed it was a consortium of Chinese companies that was successful, to the surprise of many in France, and the chagrin of some. Now the next two airports - Lyon Saint Exupéry and Nice Cote d’Azur  - are about to be privatised and there is considerable interest from a variety of investors and operators.

This CAPA report looks at the respective value of each airport as far as it can be ascertained and at who has declared an interest in it. It also seeks to apply lessons learned from the Toulouse deal.

In Nov-2014 CAPA published a report, ‘Toulouse-Blagnac Airport deal signals rekindling of airport privatisation in France.’
See: Toulouse-Blagnac Airport deal signals rekindling of airport privatisation in France.

The premise was that changing circumstances affecting central government policy meant that a number of primary airports might now be privatised. Previously privatisation had been limited to Aeroports de Paris – a partial affair involving a public listing and a cross-shareholding with Schiphol Group – and a series of management contracts at around 25 airports mainly involving French companies such as Vinci and Keolis. But the partial privatisation of the Toulouse airport unexpectedly introduced a foreign element into the equation (after the report was written) with a Chinese consortium successful in acquiring 49.99% of the equity.

French companies that had been expected to clinch the deal included Aeroports de Paris, Vinci and Ardian. The transaction encouraged the government to progress to a further stage, with a similar privatisation scenario for Lyon and Nice airports, representing the second and ninth largest French conurbations after Paris. This report asks these questions: ‘What does the future hold for potential investors here, who are they and does the Toulouse transaction hold any lessons for those investors?’

Departure of CEO fails to hold back finalisation of Toulouse Airport transaction

It is useful to look first at what has happened at Toulouse Blagnac Airport since the last report. The Chinese consortium known as Symbiose created a French company, Casil Europe (China Airport Synergy Investment Limited). The sale was finalised in Jul-2015 despite a challenge to the transaction due to the disappearance of Mike Poon, the CEO of Casil (and of Friedmann Pacific Asset Management, one of the Symbiose partners, the other being Shandong High-Speed.

It was considered to be such a serious turn of events that French Prime Minister Manual Valls felt obliged to ‘calm nerves’ about it as the transaction was completed early in Jul-2015, insisting that Mr Poon had only “indirect links” with the project (he was however Chief Executive), which promised investment of EUR300 million in the airport. Mr Valls added that the government did not intend to exercise an option for the sale of its remaining 10.01%.

Mr Poon had stepped down from his position as CEO of China Aircraft Leasing in Jun-2015, bringing about a sharp reduction in the share price as he became uncontactable.  

The failure of the likes of AdP, Ardian and Vinci to secure Toulouse Airport did not go down at all well with some politicians who are concerned about the dangers of dealing with Chinese groups for large projects. (Their concern might be shared by other European operators who are tied into deals with Chinese firms for the provision of various varieties of infrastructure; there are quite a few of them). The act of giving strategic infrastructure to a non-European group was frowned upon in a country that typically reserves its major projects for its own companies and which has been reluctant even to cede partial control of public transport organisations to the private sector.

While Air France-KLM and AdP are partially privatised the giant rail operator SNCF is not (though it is to be merged with the infrastructure operator and privatised by 2019).

Europe battles it out for inward Chinese investment

However, there were political overtones. France covets Chinese investment generally and particularly so in infrastructure projects, and is locked in a battle with the likes of the United Kingdom to secure it. Chinese foreign investment in Europe reached USD18 billion in 2014, double the 2013 level, and has averaged USD12 billion over each of the last four years. Wherever President of the Peoples Republic Xi Jinping travels to, investment quickly follows.

The French government is committed to selling assets of around EUR10 billion to pay down debt and fund new investment, with the Chinese regarded as desirable customers for some of the larger sales. That is essentially why the airport privatisation procedure has been raised from its slumbers although there was also a pressing need to find cash to finance the purchase of a 20% stake in power and rail sector multinational, Alstom, in order to veto a foreign takeover, in the case of the Toulouse sale.

The Toulouse deal was also part of a wider government bid to promote more cooperative relations between the Chinese and French aerospace industry. China is a key market in particular for Airbus, which just happens to be headquartered in Toulouse.

So to put it into context it should be noted that Prime Minister Valls made his comments during a visit by Chinese Premier of the State Council Li Keqiang to Toulouse at the end of a Franco-Chinese business summit, during which he said unequivocally, “Today I want to give this message to the heads of Chinese companies: come to France.”

Thus the real value of the deal to the people and businesses of Toulouse disappeared - at least temporarily - in the rhetoric of Sino-French relations.

Casil consortium set itself tough goals

The Casil consortium said during the bidding procedure that it planned to double the amount of traffic at Toulouse airport, which is the sixth biggest in France by passenger numbers, by opening up more point-to-point routes with Asia and Europe. This intention has since been adopted as development policy for the next few years, as part as a development of the 2014-2018 strategic plan known as "Grand Ciel +". There has been insufficient time yet for a realistic appraisal of that aspiration.

What is known is that Toulouse has been barely growing in 2015. In the eight months Jan to Aug-2015 average passenger growth was 1.1%. However, the growth rate suddenly shot up to 17% in Sep-2015, almost all of it coming from the domestic segment but this appears mainly to be a statistical aberration connected to an Air France strike at the same time last year.

There have been some announcements of new routes, including Athens, Strasbourg, Zurich, Vienna, Palermo, Agadir and Tel Aviv since Apr-2015 while Canada’s Air Transat will increase frequency so there is some progress at least in Europe.

In fairness, passenger growth has not been spectacular anywhere in France in 2015, with rare exceptions, as the country continues to grapple with the economic downturn throughout the euro area.

Taking three comparable airports including the two now partially for sale, Lyon and Nice, also Marseille, passenger growth rates from Jan-2015 to Aug-2015 (Nice) and Sep-2015 (Lyon and Marseille) are as follows:

Passenger growth rates Jan-Aug-2015

Airport

Average monthly pax growth rate
to Aug-2015

Lyon

3%

Marseille

1.7%

Nice

2.3%

Toulouse

1.1%

So it could be argued that Toulouse Airport is just a little below the average for its peers but new route announcements are positive. At this stage it is extremely difficult yet to bestow a value judgement on the merits of privatisation in this particular case.

Turning to the two airports now to be privatised, how do they compare with Toulouse?

Location map for Lyon and Nice

Lyon has a strong identity and does not feel inferior to Paris

Lyon regards itself as a metropolitan city, sitting at a western European crossroads, and in no way a junior partner to Paris. It is the second largest urban area in France with 1.6 million inhabitants, but only the 27th largest in Europe, being dominated by Paris, which is the largest, with 10.8 million.

As revealed in a CAPA report into the airport in 2012, Lyon Antoine de Saint-Exupery Airport: Pride of Lyon, poised to grow, in the field of industry and business, what began as a centre for silk making and printing, later chemicals and mechanical engineering, has broadened into one that is ever more oriented towards scientific innovation clusters, knowledge industries, software development, digital entertainment and the wider creative arts. 

The city is additionally a major centre for banking and is now regarded as the second business ‘destination’ in France after Paris and is regularly rated highly in European surveys of the best cities for business and entrepreneurship.

The city is the headquarters of companies such as Sanofi; Renault Trucks; the international transport company Norbert Dentressangle as well as intergovernmental agencies IARC and Interpol. La Part-Dieu is the second biggest French business quarter after La Defense in Paris.

The GDP of Lyon is in excess of EUR60 billion, and the city is the second richest in France after Paris.

Lyon and its region Rhone-Alpes represent one of the most important economies in Europe and, according to the UK’s Loughborough University, can be compared to Philadelphia, Mumbai or Athens regarding its international status. According to the ECER-Banque Populaire, Lyon is the 14th ranked city in the European Union for the creation of companies and investments.

It is also a major tourist centre, both in its own right and as a gateway from the west into the Alps; indeed Lyon Airport claims in its advertising to be 'the fastest way to the French Alps.' Many ski resorts are more easily accessible from Lyon than from Geneva. The city boasts a raft of galleries and performance halls, many of them positioned within a designated UNESCO World Heritage Site since 1998, as well as events such as the annual Festival of Lights and Lumiere Film Festival for which it has become world famous (the cinematographic camera having been invented there in 1895). Moreover, it is widely regarded as the gastronomic capital of France, rather than Paris. The Part-Dieu central area has one of the largest shopping centres in Europe.

Tourism is thus an important part of the Lyon economy, with in excess of EUR1 billion and four million hotel-nights spent by non-residents each year.

The airport itself has a balanced traffic mix of full service carriers, LCCs, regionals and charter airlines, as in the charts below.

Lyon-Saint Exupéry Airport capacity (seats by carrier type), 19-Oct-2015 to 25-Oct-2015

Lyon Airport still has a weakness in long haul

Some of the routes are representative of France’s old colonial connections in North Africa. Air Algerie for example has nine routes. There are over 50 airlines but there remains a weakness in long haul. Only 1.7% of the capacity is on flights between six hours and seven hours 59 minutes and only 0.1% on flights of over eight hours. There are no flights direct to the US, and only one seasonal one to Canada by Air Transat, which will be joined in 2016 by an Air Canada service.

XL Airways has a service to the French territory of Reunion in the Indian Ocean and Emirates operates a five times weekly flight to and from Dubai. The airport was pleased to get this service because traffic rights were not previously granted and Emirates was already operating at Geneva in Switzerland, only 112 km distant (70 miles). Geneva is regarded as Lyon's premier competing airport, rather than Paris or other regional airports such as Toulouse and Marseille.

Despite this coup Lyon Airport is not represented in the timetables of the other two airlines of the ME3 – Qatar Airways and Etihad Airways, and penetration by these carriers in total is comparatively low for a city-region the size of Lyon in Europe.

Air France operates to Paris Charles de Gaulle – which is its only route from Lyon after the end of Oct-2015 – and which will take a great deal of international connection traffic.

Lyon-Saint Exupéry Airport capacity (seats per week, all carriers), 19-Oct-2015 to 25-Oct-2015

Lyon is not well represented by alliances,z with over two thirds of capacity on unaligned carriers.

Lyon-Saint Exupéry Airport capacity (seats by alliance type), 19-Oct-2015 to 25-Oct-2015

Lyon’s traffic growth is good reflection of the economic doldrums France has navigated during recent years, with barely any passenger growth recorded between 2011 and 2014.

Growth in the first nine months of 2015 (Jan to Sep) has averaged 2.7% per month.

Lyon-Saint Exupéry Airport annual passenger numbers and percentage growth rates 2011-2014

Where airport landing charges are concerned Lyon compares well with Paris Charles de Gaulle airport but not quite so well with Geneva although exchange rates into the USD measure used here may influence the comparison.

Landing Charges for Lyon-Saint Exupéry Airport, Paris Charles de Gaulle Airport, Geneva Airport (USD) for 2014

New terminal to open in 2016

Lyon Airport is in the midst of a USD240 million terminal expansion programme. In 2012 an extended Terminal 3 was unveiled, one that was dedicated to providing ‘simplified services’ (in a similar manner to other French airport budget terminals at Marseille and Bordeaux for example), with double the previous capacity and a charging regime that favoured LCCs offering connecting flights. Then in Oct-2013 a contract was signed with a subsidiary of the French constructor Bouygues Batiment for the design and construction of the future Terminal 1.  

The new facility, offering 70,000sqm of surface area on three levels, will considerably increase Lyon-Saint Exupéry's passenger capacity and double the surface area of the existing terminals. The construction takes the form of an extension to the current terminals 1 and 3. The new terminal is specifically designed to meet the new expectations of passengers and to cope with increased traffic in both the low-cost and conventional segments. The works began in Dec-2014. Handover of the first phase of the project is scheduled for 2016. 

The project will replace the extended T3 referred to above and was part funded by a EUR140 million European Investment Bank loan. Financing has come mainly from retained funds; there is no external contribution from either public or private sectors other than the loan. 

Passenger capacity will rise from 10 million ppa now to 13 million in 2016 and 15 million in 2020, according to CAPA's Airport Construction Database.

The airport is contained within a geographically small area with a land reserve of only 900ha compared to 3000ha at Roissy-Charles de Gaulle (Paris). But the management has identified the potential to add two further runways although there is no need for additional runways for the foreseeable future.

High speed rail line offers mixed blessings

There are both benefits and dis-benefits arising out of France’s high speed TGV line, which passes through both the airport and the city centre, and how it fits into the scheme of operastions at Lyon.

TGV lines run through both downtown Lyon (the Part-Dieu and Perrache stations) and Lyon Airport itself, with connections running north, south and east (see map below). With such a comprehensive system in place the rail service could be a serious competitor to air services, especially to domestic ones. But the management actually promotes it widely on the basis that there is a comprehensive gateway transport system in situ that cannot be compared with any other French city, including Paris.

Other French points can be easily reached by TGV.

Lyon transport map – including TGV lines

If there is one downside it is that academic research has demonstrated frequently that high speed rail lines usually attract more passengers towards a capital city and the facilities it offers (including airports) than away from it. Comprehensive gateway transport system or not, that does appear to be the case on the Paris-Lyon line although it is very heavily used in both directions and is profitable (not all TGV lines are).

Complementing the TGV since 2010 is the Rhone Express, a fast (but expensive) rail connection to and from downtown. Not quite non-stop (it pauses at two suburban stations), the journey time on what is claimed to be France’s only genuine dedicated fast airport-city rail shuttle is around 30 minutes with 15 minute frequencies in the peak.

The present day ownership of the airport is as follows:

Lyon Airport ownership as of 19-Oct-2015

Aeroports de Lyon is a Public Limited Company in the following ratio

State (technically L’Agence de Participation de l’Etat, the Government Shareholding Agency)

60%

CCI (Chambre de Commerce et d’Industrie de Lyon)

25%

Region Rhone-Alpes Council

5%

Conseil General (Departmental Council)

5%

Grand Lyon/Greater Lyon (Comunaute Urbain)

5%

The latter three, in italics, are local authorities at varying levels. Rhone-Alpes has the sixth largest economy of any European region. This ownership share is typical of the way French airports across the country were organised until the last decade, with the local CCI playing a large part in their ownership and management, under a form of ‘licence’ from the Government.

Foreign investment activities are limited

Externally, Aeroports de Lyon has committed itself, in the past five years, to forming a small ‘group’ operation. It has done this partly by providing management consulting services at a number of African airports (the City of Lyon also provides partnership support in Africa in the field of urban services and capacity building), and more particularly by taking a small (10%) stake in Kosovo’s Pristina Airport in conjunction with Turkey’s Limak Investments, which holds 90% of the equity. Limak manages the financial side while airport specialists deal with operational matters.

The 20-year, EUR100 million operating concession involves the construction of a new terminal as a PPP project.

In Nov-2014 it was reported that Aeroports de Lyon, a Chinese finance company SCE Property Holdings Limited, and the Iranian Sana Pardakht Aras Co were to make a make a bid to provide joint investment to begin construction of the second phase of Imam Khomeini International Airport (IKIA). The second phase of that airport’s development is estimated at USD1.6 billion and will add capacity for an extra 20 million passengers per annum.

Nice-Côte d’Azur – France’s third busiest airport is better known for tourism but it packs a commercial punch

Nice is quite a different proposition from Lyon. It is a smaller city with a local population of around 400,000 and a hinterland of twice that amount (making it the fifth largest in France) but it is insufficiently large to register in the top 75 European urban areas.

That does not make it insignificant by any means though. It is France’s premier tourist city after Paris and gateway to the Côte d’Azur. While it is accessible by train and highway its position on the Mediterranean coast requires a long surface journey.

Moreover it has more commerce and industry than it is given credit for. There are several business and technology parks in and around Nice, the most notable of which is Sophia Antipolis near Antibes, some 15 km from the city. It houses companies in the fields of computing, electronics, pharmacology and biotechnology. There are several institutions of higher learning also located here, along with the European headquarters of the World Wide Web Consortium and the European Telecommunications Standards Institute. 

The Nice metropolitan area has a GDP in the order of EUR50 billion per annum but a GDP per capita that is often slightly below the French average.

Together with an international conference centre, the arts festivals held in Cannes and regular visits year-round from wealthy individuals (including to nearby Monte Carlo, Monaco [there is a helicopter service] and to the adjoining Italian Riviera), a robust traffic mix is ensured at Nice Cote d’Azur Airport.

This is reflected in traffic figures. Nice-Côte d’Azur is the third busiest airport in France and the only one outside of Paris to get into double digit millions. There were 11.7 million passengers in 2014.

The rate of growth has been in steady decline during the last three years – it was just 1% between 2013 and 2014 with, again, the economy playing a large part. Average growth in the first nine months of 2015 has been 2.3%.

Nice Cote d’Azur Airport annual passenger numbers

As with many other French airports Nice-Côte d’Azur has a high "full service" operations ratio

Low cost operations in France have not yet reached the level found in many other European countries for many reasons including the airport charging regimes. Consequently the ratio of seat capacity on full service carriers is quite high compared with an equivalent British airport for example. (Indeed, the ratios are often reversed, between full service and low cost when comparing with a UK regional airport).

In Nice’s case 55.1% of capacity is on FSCs just now, compared to 47% at Lyon, 47.9% at Bordeaux and 64.4% at Toulouse.

There is not quite as broad a traffic mix at Nice as at Lyon but 55% FSC is a ratio many comparable southern European airports would aspire to.

Nice Cote d'Azur Airport capacity, seats by carrier type, 19-Oct-2015 to 25-Oct-2015

Of the FSCs at Nice-Côte d’Azur Airport, the most important is Air France, with 19.4% of capacity, much of it to Paris CDG and Orly airports, thus keeping open intercontinental flight options.

As of the end of Oct-2015 and in a similar way to Lyon, Air France domestic services out of Nice to cities other than Paris will end, to be replaced in some cases by services operated by low cost subsidiary HOP!

Nice Airport capacity (seats per week, all carriers), 19-Oct-2015 to 25-Oct-2015

There is a small number of intercontinental services at Nice, including Delta (New York), Air Canada Rouge (Montreal, seasonal), Air France (Tel Aviv, seasonal), Air Transat (Montreal and Toronto, seasonal, commencing 2016), El Al (Tel Aviv), Emirates (Dubai), Israir (Tel Aviv), and MEA (Beirut, seasonal).

As for alliance penetration, it is greater at Nice than at Lyon, where the unaligned ratio is almost 70%.

Nice Cote d’Azur Airport capacity (seats by alliance type), 19-Oct-2015 to 25-Oct-2015

As at Lyon, there is some construction activity under way at Nice.

Terminals 1 and 2 are being redesigned and extended as part of a major retail and facility expansion project. The expansion will cost EUR30 million. Renovation work for Terminal 1 (T1) started in Jan-2015 with a completion date of May-2016. Terminal (T2) is scheduled for completion in May-2017 with planning work starting in 2015. In Nov-2014 the European Investment Bank (EIB) signed a financing agreement of EUR100 million for the expansion and modernisation of the airport.

The ownership of Nice Cote d’Azur Airport is on very similar lines to that of Lyon, with the State (the French Republic) owning 60% with the remaining 40% split between other public bodies including Nice’s Chamber of Commerce, the Alpes Maritimes Department and the Metropolis Nice Côte d'Azur.

Nice Cote d'Azur Airport ownership as of 19-Oct-2015

Again as with Lyon the airport is a small scale foreign investor. Nice is a 2% shareholder in the Hermes Airports consortium that operates the Larnaca and Paphos airports in Cyprus. It also manages Cannes Mandelieu Airport. 

In mid 2013 Aéroports de la Côte d'Azur acquired 99.9% of shares of AGST (Saint-Tropez Airport), previously owned by the Reybier Group for the past 15 years. At much the same time Greece's Hellenic Republic Asset Development Fund SA (TAIPED) said that the airport was one of 11 consortia to have expressed an interest in taking over the operation of Greek regional airports and had progressed to the second stage (a transaction that ultimately went in favour of Fraport).

Nice Cote d’Azur airport’s privatisation is rejected by the Mayor and by almost all the plebiscite

Despite the National Assembly having voted in favour of the privatisation of both airports, the Mayor of Nice, Christia Estrosi, put up strong opposition and in Dec-2014 announced his intention to oppose the proposal and that “we must defend our right to control our own destiny.” The Mayor argued that privatisation would place the fortunes of Nice’s airport “solely in the hands of external investors”. Although not strictly accurate - he also said it would “pass the airport into the hands of investors whose only motivation would be profit maximisation,” (which may be the case) - and indicated he would call a referendum. When it took place, 97.5% of the 216,000 electors who took part rejected the privatisation.

Prior to the referendum, Estrosi sought but didn’t get three amendments to the current proposal. The first aimed to gain a right of first refusal for public authorities prior to any purchase by external investors. This would, in theory, enable the city of Nice and the Alpes Maritimes Department to buy out the government’s share if they secured the necessary funding.

The second amendment would ensure that the State may only authorise a transfer of a minority stake in the airport rather than the proposed majority. Finally, the mayor demanded that there must be endorsement of any offer by all public shareholders prior to sale.

However, there is no legal basis to the referendum result; it merely adds bargaining power to the "No" lobby, in the Mayor’s estimation. But realistically he has run out of time now unless the government gets cold feet.

While no similar referendum is known of in Lyon, it appears that local political parties of all colours in both cities are united in rejecting the privatisation. There are also objections to the way the "Macron" bill that paved the way for the privatisation (and which is effectively economic growth legislation) has developed into what is known locally as a "bandwagon" bill in that it brings together many unrelated measures, from Sunday opening hours for shops and stores to reforms in the practice of notaries, to airport privatisation.

It might appear that in the public estimation this transaction is attracting much more in the way of opposition than did the one for Toulouse Airport (even allowing for the fact that a crowd funding mechanism was set up there by anti-airport campaigners); but the majority of that opposition is coming from Nice, and partly on account of the numerous expatriates who live on that coast. They tend to perceive Nice Airport as well managed, are aware of privatisations in their own countries that have not lived up to expectations and believe, as the saying goes, ‘if it isn’t broken, don’t fix it’. It is an argument often heard before, especially in Spain in the run up to the partial privatisation of AENA.

The timescale for the deal: final buyer selection should be in 1Q2016      

It is the federal government's majority interest in each that will be offered to investors. The Lyon airport is estimated to have a market value of USD845 million, while the not that much larger Nice Cote d’Azur  Airport is estimated to be worth USD1.8 billion. (Other valuations have placed both at over EUR1 billion (USD1.135 billion).

CAPA has been unable to obtain confirmations of these valuations from the airports. In the case of Nice no EBITDA figure for 2014 is known either. The publicised annual accounts document for that year refers to a "gross operating surplus" which may be the same thing, of a little over EUR100 million. That would suggest a multiple of 18 on earnings, which is a little high but not out of the ball park altogether because of the way airport valuations have been rising during the last year or so.

In the case of Lyon, EBITDA of EUR53.2 million was achieved in 2014, indicating a valuation multiple of 15.9 times earnings.

When looking for recently individually privatised or resold airports that can be directly compared with Nice and Lyon, the most appropriate example is probably Edinburgh Airport in Scotland, which had 10.1 million passengers in 2014, a figure which falls between the two French airports in that respect and which handles a similar mix of business, leisure and VFR traffic. When Edinburgh changed hands from BAA to GIP in 2012 it was at an EV/Earnings multiple of 16.7, one of the largest recorded in recent years apart from the Brazilian privatisations.

The first calls for offers will be made in Oct-2015, for pre-qualification in the middle of Nov-2015. A second phase in Dec-2015 will lead to final selection of new owners in the first quarter of 2016.

Intense competition has been anticipated.

The state will retain its say in application of airport taxes and DGAC, the Civil Aviation Authority, will have control of the opening of new air links.

Buyer interest is high, with 17 parties, including Asian investors

There is a great deal of interest in these transactions, from within France and Europe generally, 17 parties in all (some in pre-announced consortia) including interest from Asia but not from China so far.  

Investors/operators known to have expressed interest in the Lyon and Nice airport transactions

Operator

Country

Notes

Aeroports de Paris

France

Joint EoI for Toulouse Airport with Predica (Credit Agricole). CEO Patrick Jeantet noted recently the high prices of some recent airport sales, stating that some of the Brazilian concessions were in the (financially) “crazy” category, while, more to the point, the EUR308 million purchase of Toulouse Airport was also overpriced in his view. AdP said it would not bid for Lyon Airport but is interested in Nice Airport. AdP is currently or has been recently involved in bids for two airports in Madagascar for a package of regional airports in the Philippines as well as a bid to run Jeddah Airport.

Vinci

France

Operator of many airports in France, Portugal and Cambodia via a variety of ownership or lease mechanisms. Sole bidder with Orix in the Osaka airports deal in Japan. Just began concession for Santiago Airport in Chile (with AdP). Approved to final stage of bundled Philippine regional airports operations and maintenance contracts tender. Concessionaire for new airport at Nantes.

Allianz Capital Partners

Germany

Also involved with Borealis Infrastructure, which manages investments for the Ontario Municipal Employees Retirement Systems, to explore a bid for London City Airport.

Atlantia

Italy

Majority shareholder in the Rome airports. Reported to have expressed interest in Nice Airport.

Ferrovial

Spain

Has reduced UK interests to 25% at Heathrow Airport and 50% share in three regionals. Withdrew from AENA transaction.

Global Infrastructure Partners

US

Currently seeking to dispose of its majority share in London City Airport.

Industry Funds Management

Australia

Investor in various airports of different sizes in Australia; minority shareholder in Manchester Airport Group; drove – with MAG - potential lease acquisition of Chicago Midway Airport. Minority shareholder of Vienna Airport. Bid in Japanese airport privatisation.

Macquarie Group

Australia

Also involved in a bid for London City Airport and reported to have been in discussions concerning a partial privatisation of the under-construction Berlin Brandenburg Airport.

AENA

Spain

On the acquisition trail again following the partial privatisation earlier this year. However, appears subsequently to have ruled out a bid on the grounds it wishes to avoid making strategic decisions that would have required heavy investment prior to a general election.

Changi Airport Group

Singapore

Last venture was Rio de Janeiro Galeao airport in the second round of Brazilian airport concessions.

Malaysia Airports Holdings Berhad (with OTPP and CPP)

Malaysia

Currently focused on opportunities in India and Indonesia.

Ontario Teachers Pension Plan (OTPP) (with MAHB and CPP) 

Canada

Also reported to be preparing to bid for London City Airport as part of the Wren House Infrastructure consortium. Has other investments in the UK, also Brussels and Copenhagen airports.

Canada Pension Plan (CPP) (with MAHB and OTPP)

Canada

Previously involved in actual or potential consortium bids for airports in the UK and Spain.

Abu Dhabi Investment Authority

UAE

Holds a minority stake in London Gatwick Airport and will take a similarly sized stake in Aeroporti di Roma.

GIC Special Investments

Singapore

Maintains a minority stake in London Heathrow Airport. Other minority holdings.

Wren House

Kuwait/UK

An investment vehicle owned by the Kuwait Investment Authority, Ontario Teachers’ Pension Plan (above) and Hermes Infrastructure. No airport assets yet. Believed to be bidding for London City Airport.

Geneva Airport

Switzerland

No previous investments. Part of the CUBE consortium. Geneva Airport would contribute its management expertise rather than funding. The CUBE Investment Fund is currently affiliated with the Natixis group, an international financing, management and financial services bank of the BPCE (Banque Populaire - Caisse dépargne) group, the second-largest banking group in France, firmly established in the French regions and with local authorities.  

Learning the lessons from Toulouse's privatisation

Firstly, the transaction will almost certainly go ahead. There was a strongly negative reaction to the Toulouse proposal but it was pushed through nevertheless. The overall state of the French economy has not improved sufficiently for a reappraisal of the need to conduct transactions of this nature for the overall good of the nation and despite the continuing strength of the local opposition.

There has been no (known) demonstration of interest from China so far but then again the entry of what became known as the Symbiose consortium came late in the day at Toulouse.

The strength of the European (and North American) investment contingent is greater for Lyon and Nice Airports and would it require a concerted effort by any Chinese investor or consortium – and an ample bid to go with it – to get among the leaders, mindful of the lingering suspicions.

Chinese investors certainly are active at the moment. For example HNA Group, which toured Europe around five years ago looking for airport investment opportunities, has recently been linked with Manchester Airports Group, though that might have arisen out of a misunderstanding over the intentions of other parts of the group. But the presence of Beijing Construction Engineering Group as a major investor at the airport city in Manchester might well stimulate interest among similar groups in China (of which there are many).

Lyon would be more of a target than Nice. There is no known intention to build an "airport city" there and space is limited anyway. On the other hand Lyon is in an admirable position for road and rail transport, with excellent infrastructure already in place, and part of a metropolitan area that is gradually merging with that of Geneva to form a continuous one stretching close to 100 km.

Nice has less attractive surface links but the existence of so many technology parks already might be attractive to a Chinese investor.

More details can be expected, and not only in mainland France

Assuming the Lyon and Nice deals are consummated, there are further possibilities to follow. Airports such as Marseille and Bordeaux, both more attuned to low cost traffic and with dedicated terminals, must come into the frame. Also, Montpelier in the south and Strasbourg in the east. But there are also airports in the French territories, such as Fort de France in Martinique (French West Indies) and Réunion’s Saint-Denis airport. There will probably be an allotted amount of time to evaluate progress on the existing transactions first.

Coincidentally, the continuation of the Lyon and Nice deal was confirmed just as the Loire-Atlantique Prefecture announced that the State will proceed with the project to construct the Airport of Notre-Dame-des-Landes (Nantes), which has been suspended since autumn 2012.

The contract for implementing the project was awarded to Société Aéroports du Grand Ouest, a subsidiary of the Vinci Group, which also operates the existing airport under a management contract.

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