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Analysts expect the sale of Edinburgh airport to raise around £500 million for owner BAA |
UK. Korean airport authority Incheon International Airport Corp is expected to submit a bid for Edinburgh airport in the auction being held by owner BAA, according to Bloomberg Businessweek. Incheon is a surprise contender, after four indicative bidders for the airport were named earlier this year: London Gatwick and London City airports owner Global Infrastructure Partners (GIP), US investor Carlyle Group, US bank JP Morgan and a consortium led by 3i.
Carlyle Group and the 3i consortium have withdrawn from the process following talks with the Competition Commission – which requires BAA to sell either Edinburgh or Glasgow airports – over the potential cost of migrating Edinburgh from the BAA computer network. The Bloomberg report claims that only Incheon and GIP remain in the competition, while the Financial Times mentions GIP and JP Morgan as the remaining bidders.
Final bids for the airport are due in mid-April. Analysts anticipate a sale price of around £500 million based on the multiple of earnings paid for London Gatwick airport three years ago. The final price may be influenced both by the cost of IT systems and by other impending airport sales in the UK. The Competition Commission has also ordered BAA to sell London Stansted airport – a decision the airport operator is contesting – while earlier this month Infratil announced its intention to sell Glasgow Prestwick airport.
GIP has made aggressive moves in the UK airport in recent years and earned plaudits for its impact at Gatwick in particular, having worked with airlines to reduce check-in times and improve security processing. And at London City airport, which it bought in 2006, it has added runway capacity and improved punctuality. At both airports it has made significant changes to the commercial offer.
Edinburgh airport welcomed 9.4 million passengers in 2011, up by +9.2% on the previous year. BAA anticipates passenger numbers will reach 12.3 million by 2020.
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