BAA Puts Gatwick On The Market At Volatile Time
"We have decided to begin the process of selling Gatwick
Airport immediately." With that announcement -- issued this week by
Colin Matthews, CEO of British airport operator BAA -- one of
Britain's busiest airports is now on the market, in the face of an
uncertain economy and over protests by union workers.
Forbes reports Grupo Ferrovial, the Spanish-held company that
owns BAA, put Gatwick up for sale "reluctantly," noting the current
condition of the global financial market make this a rotten time to
attempt to sell off an airport. But one analyst believes BAA can
still get a fair price for Gatwick.
"Although the current financial situation could affect the
valuation of airport, this is a very attractive asset, an airport
at full capacity in a market hungry for this type of investment,"
said Victor Acitores, with Landsbanki Kepler in Madrid.
Another industry watcher isn't so sure of that. Collins Stewart
analyst Andrew Fitchie believes Gatwick will sell for around $3.6
billion... a lowball price, that in his opinion represents "an
indictment of a failed expansion strategy which leaves the group
overloaded with debt at a time when cyclical pressures are bearing
down across its operations."
Ferrovial bought BAA in 2006 -- and reportedly borrowed quite
heavily to do so -- in order to bolster its presence in the
aerospace field. There were signs from the start that plan was a
mistake... and Ferrovial took heat over allegations it was
improperly bolstering its earnings claims to hide the amount of its
losses.
By August 2007, the company ordered the seven airports under
BAA's control to review and report on their staffing and overall
costs. As ANN reported, Ferrovial also hinted it would consider
selling off at least one of those airports -- Heathrow, Gatwick,
Stansted, Edinburgh, Glasgow, Aberdeen and Southampton.
Earlier this month, Britain's Competition Commission
recommended BAA sell off at least two of its facilities.
Since Monday's announcement, press outlets throughout Europe
have speculated on potential buyers. Names bandied in various media
include Sir Richard Branson, owner of the Virgin Group; Germany's
Fraport authority; and Australian bank Macquarie.
Predictably, BAA's announcement drew fire from the British labor
union Unite, which represents many airport workers throughout
Britain. "This announcement brings uncertainty for hundreds of
Unite members," said national union officer Brian Boyd. "Unite will
now be doing everything it can to ensure that the Gatwick workforce
do not become the losers."
"It simply beggars belief that a For Sale sign can be hung
across the country's second largest airport," added union officer
Steve Turner. "Gatwick is a core component of the national
infrastructure and an essential part of the UK's aviation sector,
yet it is to be flogged off with little care for the wider social
impact. This is devastating news to the many hundreds of
professional, loyal and dedicated staff at Gatwick Airport and it
will hit passengers too."