BAA sells Gatwick for £1.5 billion

Gatwick Airport: Going for £1.51 billion

In a bid to reduce their massive £10 billion debt burden, Ferrovial - the Spanish infrastructure company that owns BAA, has agreed to sell Gatwick Airport for £1.51 billion. The airport will be sold to Global Infrastructure Partners, an investment fund that already owns London City Airport.

The sale has been predicted since March, when the Competition Commission stated that BAA would have to sell the airport within two years as well as Stansted and either Glasgow or Edinburgh due to "competition problems" at each of its seven UK airports. However, BAA has been quick to point out that it had already unveiled plans to sell Gatwick in September 2008 before the Competition Commission published their results.

BAA is appealing the decision to sell more airports, if it loses it will means the end of the company's 40 year monopoly of London's main airports. Colin Matthews, BAA chief executive said to the BBC, "Gatwick and its people have long been a central part of BAA and we are proud of the airport's development as one of the world's leading international airports.

"BAA is changing and today's announcement marks a new beginning for both Gatwick and BAA. We wish Gatwick well for the future and are confident that the airport will flourish under new ownership.

"BAA will focus on improving Heathrow and our other airports."

He added that BAA would now focus on improving Heathrow and its other airports. The airport operator believes the Competition Commission ruling was compromised because of a link between a member of the ruling panel and an organisation interested in buying the airports. BAA also argues that the recession has impacted the airports' sales and the commission has taken this into account in their decision.

New future for Gatwick

Global Infrastructure Partners are expected to start a series of developments at Gatwick upon acquiring the airport. Many industry experts are expecting the company to rebrand Gatwick as the airport of choice for holidaymakers in the South East.

For years, Gatwick has, in some circles, been viewed as the 'poor man's Heathrow', but Global Infrastructure Partners is understood to want to attract holidaymakers rather than businessmen as part of its strategy to rebrand the airport.

The sale is subject to EU merger regulation clearance and is due to be completed in December.

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