Friday, 28 December 2018

The French buy controlling stake in London Gatwick Airport for £2.9billion

London Gatwick Airport made global headlines just before Christmas when a number of drone incursions caused the airport to close for days. Now, the airport is making more global headlines, this time after it was revealed that French firm VINCI Airports has agreed to buy a controlling stake (50.01%) in the Sussex airport for £2.9 billion.

VINCI Airports is a major airport owner, controlling over 45 airports located in France, Portugal, Sweden, Serbia, Cambodia, Japan, United States of America, Dominican Republic, Costa Rica, Chile and Brazil.  It recently also purchased Belfast International Airport and is understood to also be interested in taking a controlling stake in another UK airport, in the north of the country.

The deal is expected to be complete by the second quarter of 2019, with the remaining 49.99% still being managed by Global Infrastructure Partners. Gatwick’s Chairman Sir David Higgins, said, “We very much welcome this commitment from VINCI Airports to Gatwick which is a vote of confidence in Gatwick and its future potential.”

There will be no immediate changes to the current management team and its business as usual for the UK's second busiest airport, according to Chief Executive, Stewart Wingate, "Our Chairman and I, along with our senior management team, will all remain at Gatwick and look forward to improving services further for our passengers. There will be no changes to the immediate running of Gatwick and we expect the transaction to complete by the middle of next year.

“Now we are through the recent disruption at the airport and services are fully back to normal I would once again like to express my thanks to passengers for their patience during this challenging period. I would also like to thank all those who have supported my teams in getting Gatwick back up and running, particularly our airlines, the police, the armed forces, other airports, the CAA and the Department for Transport." Wingate went on.

“I know this unprecedented criminal activity caused huge inconvenience to thousands of people - many of whom missed important family events in the run-up to Christmas. We have appreciated the understanding and tolerance shown at what was a really challenging time for everyone, and we are grateful that passengers recognised that we should never do anything that might jeopardise their safety. There are obviously wider strategic lessons for everyone involved to prevent it happening again, and Gatwick itself has taken a number of important steps in recent days which will make a significant difference to the airport’s resilience." Stewart Wingate said.

Nicolas Notebaert, Chief Executive Officer of VINCI Concessions and President of VINCI Airports said, “Creating synergies and sharing best practices being at the core of our values, the whole VINCI Airports network will benefit from Gatwick Airport’s world-class management and operational excellence, which has allowed it to deliver strong and steady growth in a very constrained environment. As Gatwick’s new industrial partner, VINCI Airports will support and encourage growth of traffic, operational efficiency and leverage its international expertise in the development of commercial activities to further improve passenger satisfaction and experience.” 

It's clear the weaker pound sterling due to current uncertainty made buying into London Gatwick a much cheaper arrangement for VINCI than would otherwise have been possible.  It has also opened the door to other major investment opportunities for foreign companies to take advantage of the current economic situation and outlook. 

Like most major infrastructure ports and airports in the UK, Gatwick will be owned by mostly overseas corporations and conglomerates, GIP also owns Edinburgh Airport. The UK's busiest airport Heathrow is owned mostly by Spanish, Qatari, Singaporean and Canadian organisations. The Manchester Airports Group that runs Manchester, Stansted and East Midlands is part owned (35%) by an Australian investment company.  Aberdeen, Glasgow and Southampton airports are owned by AGS Airports Limited which is jointly opened by the Spanish Ferrovial and the Australian Macquarie Group. Birmingham is mostly owned by the seven local councils and a Canadian pension fund. Most of the UK's ports including Southampton, Plymouth, Cardiff, Lowestoft, Ipswich, Hull and Grimsby are owned by Candian, US, Kuwaiti and Singaporean investment firms. 
(Photos London Gatwick)