Pssst - want to buy an airport?

The airport's global infrastructure owners have told the Chief Executive to prepare for a sale this year. The current market for airports is rather glum, so they'll be using some cunning financial ploys to ensure they're ready for when the market picks up.

Oh, this is London City Airport, by the way...

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London City airport owner prepares for sale. 

GIP wants new chief executive to review exit options, in hope of eventually fetching £1.25bn. The incoming chief executive of the Square Mile's favourite airport, London City, has been told by its owner to review sale options when he starts in the spring. Declan Collier, who joins from Dublin airport, has been asked by Global Infrastructure Partners (GIP), which also owns Gatwick, to look at a potential sale in his first months in the job. Investment banking advisers could be selected by the end of the year.

This comes at a time of unprecedented upheaval for the airport industry. Edinburgh is up for sale, Stansted could be soon, and the Government is proposing an airport in the Thames estuary. Other options for London City, which had 7.6 per cent more passengers last year, include syndicating the equity as GIP did for Gatwick in 2010. For example, Abu Dhabi Investment Authority spent £125m for an estimated 15 per cent shareholding and Calpers, the US pension fund, dished out around £105m for a 12.7 per cent stake.

Sources close to GIP said that a banking appointment would leave City, a favourite with business due to its efficiency and proximity to London's financial centres, able to sell quickly when market conditions improve. At present, the airport would struggle to fetch much more than the £742m that GIP – then in conjunction with AIG – paid in 2006, despite significant operational improvements. In a buoyant market, GIP and the current minority stake partner Highstar Capital could expect as much as £1.25bn.

If Mr Collier recommends a sale, it is unlikely to take place until late next year when GIP can profit on its investment. A source said:

"Timing is the only thing that matters. There are different ways of exiting – GIP looks at what happened with Gatwick and selling slices as a successful model."

Mr Collier replaces Richard Gooding, who will stay on as a non-executive director at the airport. Mr Gooding declined to comment on the potential sale.

Although GIP seems set to, at least, sell down some of its stake in London City, the US-based infrastructure group is believed to be interested in buying Edinburgh airport. The deadline for initial bids on Edinburgh is next month and Royal Bank of Scotland is believed to be advising GIP on its potential offer. Edinburgh is expected to fetch in excess of £600m, though the price might be slightly depressed as it is a forced sale. The airports operator BAA has been ordered by the Competition Commission (CC) to sell-off Edinburgh, as it is considered to have a near-monopoly in Scotland, just as it was at Gatwick.

BAA, which is owned by the Spanish group Ferrovial, is still fighting the CC's ruling that it should also sell off Stansted. The CC argued that by owning Heathrow and Stansted, as well Gatwick until 2009, BAA was too dominant in the South-east. However BAA believes that Heathrow and Stansted serve different markets, the former focusing on business and the latter leisure.

The future of UK airport infrastructure was a major talking point last week, after it emerged that the Government would be consulting on the possibility of building a new airport in the Thames Estuary. This is a plan for which London Mayor Boris Johnson has lobbied hard and which would negate the need to expand at Heathrow.

Independent 22nd Jan 2012

What it’s like living with City Airport

Think before you fly

In 2009 Newham residents Dot and Barry Palmer were invited to give a speech at City Hall about life under London City Airport. The airport has been granted planning permission to further raise the limit on the number of flights – from 73,000 to 120,000 per year. [This is Charles Buchanan's legacy - he is proud of having got this through without a Public Inquiry.]

Their speech in full:

Dot Palmer: We were born and we lived all our lives in Newham. We came from a long line of poor working families. We lived with two daughters in a small flat in appalling conditions. By that I mean we had no electricity, we had no toilet facilities, and all social services wanted to do was take the children away, but we fought them and we ended up moving into a pre-fab in 1970 because they had to re-house us. Kim was 2 and Collette was 6 months. It was one of the various pre-fab estates across Beckton that were built just after 1945. Social housing was the only option then – private rental was far too expensive and buying didn’t even enter into people’s heads. Home-owning was a fantasy land where fairies come from. But life there was good – then. It was a nice place to live, albeit rather remote. We soon learned 2 standing jokes of the area: on one hand it was like living in the country, on the other hand we were known as the forgotten people on Devil’s Island.

Barry Palmer: Redevelopment in the area began in 1976 and our estate was demolished. We moved to another area in East Beckton. By now we had two boys – Bobby was four and Tony was 2. It was still a nice place to live – we even had a farm at the bottom of our garden. Newham was having a new show estate built by the docks to re-house all the displaced people in the area. This was our first brush with the authorities. The tenants protested about the pile-driving that went on all hours, day and night, seven days a week.

In 1981 this area was also demolished. We had no idea that was going to happen, and we had to move again.  We were moved on to the new show estate, and our council house was so new the decorators were still working when we moved in.

Years later developments began that would change the quality of our lives forever. When the airport was first suggested, in one of the most densely populated areas of the country, it was ignored as the raving of a lunatic – in much the same way as the airport in the middle of the Thames is viewed now. But soon the whole asylum turned out saying what a wonderful idea it would be.

Dot Palmer: Locals lobbied against it from the start. We didn’t believe all the PR they told us, and that still continues today as they all prove to be lies.  Each time our quality of life got worse. Using your garden in the summer during the day is out of the question. It was too noisy and the smell choked you. Even having the doors or the windows open was a no-no. When we complained we were told “get some fans”. Washing can’t go out on the line because it smelt of aerofuel, and we were told “get a dryer”. I pointed out that fresh air is free, and it would drain our resources. But all to no avail.

People’s lives changed to adapt to this intrusion. Chatting to a neighbour in the street, you automatically paused in the conversation when a plane went over. And then you carried on again afterwards, even without realising you were doing it. And then they have the bird-scarer which bangs and shocks you out of bed at 6.30 in the morning. In 1998 we were promised to have some evergreen arboreal tree barrier, and we helped plant it last year.

Barry Palmer: And when the City Airport stops, the DLR starts. The maintenance trains rattle up and down all hours of the night. You know when they’re coming because the tannoys on the station tell you. Apart from weekends when you can’t hear them because the boy racers use the Docklands spine road as a racetrack. The DLR was originally to be elevated all the way. We protested against the infringement on people’s privacy. Underground was out of the question because of the cost. So the compromise was made: it was going to be in a cut and cover. More lies – we got the cut, we’re still waiting for the cover.

Likewise the Docklands Spine Road. Originally the Docklands Spine Road was going to be a dual carriageway using the road outside our houses as one side of the dual carriageway  – a footpath away from where the children come out into the street. Again protest, again a compromise and it was built further south.

These developments in pursuit of the great god money have brought little value to most of the local people, with the City Airport being the worst offender – a little surprising when the average wage of City Airport users is £185,000 a year.  A single parking space in London City Airport earns more money than 30,000 families in Newham. Local pollution is 50% higher than EU recommendations.  The area has the highest mortality rate for under-30s in the country. It is in the top 3 in the country for cardio-vascular and respiratory diseases, asthma being at the top. Myself and two of our children are long-term sufferers.

We have gone from 30,000 whisper jets a year to 120,000 jets and they are now even boasting a 100-seater to New York. Many thousands of jobs promised have never materialised, but the greatest cost has been to the quality of life of the local communities and the impacts on the environment as a whole

Dot Palmer: We always worked locally trying to make things better, serving on residents and tenants committees, setting up a neighbourhood watch and the Safer Neighbourhood policing team. We still are school governors and we set up and run a local youth watch club for ten years – voluntary I might add. Unknown to us, we were nominated – and then presented with – two of the first twelve Good Citizen awards for our youth work.

But now the Beckton we loved and where we raised our family is no more. The communities are almost gone, the old neighbours either passed on or moved away. What we have now is a transit camp, a car park, and a dumping ground. The area has now been left to go to ruin. What price progress? 40 years on, and we still are a forgotten people.

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Thanks to Climate Rush

Buchanan in court, out of order

London City Airport is in court. Local residents and campaigners (Fight The Flights) have attracted national attention to their argument that Newham Council's approval of the tens of thousands of extra flights that Charles Buchanan pushed for was both stupid and wrong.

Our all-seeing and tireless spies have infiltrated the London courts to keep an eye on things on your behalf. As you can imagine, the courts are rather fusty and very proper and conservative (with a small "c") places. Proceedings were grinding along at their customary slow but fine pace when who should make a conspicuous late arrival but our own beloved Charles Buchanan.

By all accounts he made quite a show of himself, rearranging a row of people so that he could settle down in his chosen place, like one of those annoying late arrivals at the theatre or cinema. This might all have been forgivable if he had been homing in on a seat with the best view and acoustics, and had then sat agog and rapt for the rest of the day.

But no, young Charles seem to have chosen his seat for best WiFi reception, as he proceeded to tap, type and text away to his heart's content, impervious to the death stares from those around him. Spectacles glinting, eyebrow arched, fingers jabbing, the very picture of airborne power incarnate.

Of course, given the amount of texting and messaging he was doing, he couldn't possibly use illiteracy as an excuse for not reading the "NO MOBILE PHONES ON" sign clearly displayed on the way in to the court. The assorted m'luds and m'learneds were deeply unimpressed, I am told. This is no way to make friends, Charles, but I think you may have influenced some people.

Manston could help ease strain of games

Clipping: thisiskent

Bosses at Manston airport have revealed they are in talks with Olympic officials such as organising committee chairman Seb Coe to give the airport a role in the 2012 London games. Chief executive Matt Clarke believes the airport’s location and facilities will mean it can be used to fly in athletes, fans and equipment to the London gamese the inevitable strain placed on Heathrow, Gatwick, Stansted and London City airports in 2012. He said:

"The Olympic Games is the biggest sporting spectacle in the world and competing athletes, their coaches, equipment and spectators in large numbers will be flown in from around the world during a relatively short period of time. Given that the London airports are frequently congested under normal circumstances – let alone when the biggest sporting event in the world comes to town – it is quite clear that Kent International Airport will have a role to play."

The airport chief predicts their will be a build-up in charter flights over the isle before the games but also expects private jets to be shooting across the isle. He continued:

"We expect to see is an influx of private jets, inbound chartered passenger flights and freight services immediately before and during the Olympics. We do not expect to see an increase in jobs relating specifically to the Olympics business as we will already have the resources required to accommodate the brief step-up in activity. The biggest constraint for an airport close to an event of this scale is more likely to be aircraft parking space as there is sure to be a vast number of aircraft from all over the world to descending on the south east in a short space of time. We have had discussions with a number of people involved in the planning of the event and they are aware that we have significant capacity to accommodate air traffic during what will be an extremely busy period."

London Mayor Boris Johnson is also setting his sites on Manston. Writing his column in the Daily Telegraph he said:

"South-eastern councils and the London authorities have decided to look again at all the options around London that could save us from the mistake of expanding Heathrow. They include making better use of existing assets, not least Manston, which has the longest runway in the country."