Ryanair Seeking 25% Stake in London Stansted Airport Bid Group
Ryanair Holdings Plc (RYA), Europe’s biggest discount carrier, said it’s keen to take a 25 percent equity stake in London’s Stansted airport by participating in one of a number of groups that may bid for the BAA Ltd. (FER) asset.
Ryanair, Stansted’s biggest customer, is prepared to make “a modest commitment” as “anchor tenant” at the airport and has been examining proposals from five or six groups, from which one or two serious bids are likely to emerge, Chief Financial Officer Howard Millar said at a press conference in London.
“Stansted is the only place in London where another runway can be built,” Millar said, “It makes more sense to have it at Heathrow, but Stansted is the only place with capacity and we want a 25 percent stake.”
Britain’s fourth-busiest airport moved closer to an auction last week when the Court of Appeal in London dismissed BAA’s appeal against a sale ordered by the U.K. Competition Commission. The unit of Spanish builder Ferrovial said July 26 it’s likely to take the issue to Britain’s Supreme Court.
South Korea’s Incheon International Airport Corp. may be among bidders for Stansted should BAA be forced to sell, aviation marketing director Tae-Soo Yuh said in London on June 25. It could face competition from Manchester Airports Group, owner of Britain’s busiest airport outside London, which has been seeking outside investment to fund purchases, Chief Executive Officer Charlie Cornish said last month.
Billionaire Li Ka-shing’s Hong Kong-based Hutchison Whampoa Ltd. is interested in buying a stake in Manchester Airports, Managing Director Canning Fok said in Vienna yesterday.
Bid groups would welcome Ryanair because its involvement would bring security and a guarantee of future airport growth, according to the Dublin-based carrier, which has clashed with BAA over access fees.
“Stansted has doubled their airport charges, prompting EasyJet to move to Southend, but we want them to reduce charges in order to increase traffic,” Millar said.
EasyJet Plc (EZJ) this year began flights from Southend, 54 miles (87 kilometers) east of London, after saying it would “rationalize” its operations at Stansted.
Bids for Stansted are likely to comprise 50 percent equity and 50 percent debt, so that Ryanair’s contribution would amount to one-eighth of the total cost, the executive said.
Stansted is BAA’s busiest airport after Heathrow, Europe’s top hub, following the forced disposal of London Gatwick to Global Infrastructure Partners Ltd. for 1.51 billion pounds ($2.37 billion) in 2009.
BAA also agreed to sell Edinburgh airport to GIP for 807.2 million pounds in April in order to comply with a requirement to unload a Scottish terminal. New York-based GIP’s purchases mean it wouldn’t be able to bid for Stansted.
Stansted attracted 18 million passengers last year, versus 69 million at Heathrow and almost 34 million at Gatwick. It also ranked behind Manchester’s 19 million, but placed ahead of London Luton and Edinburgh, each with about 9.5 million.
To contact the reporter on this story: Eleanor Lawrie in London at firstname.lastname@example.org
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