Originally Posted by
SARF
1 billion would be enough
A multiplier of around 25 x EBITDA is reasonable for airport sales. The current "underlying" EBITDA at Southend is circa £3 per pax (with "underlying" not easy to define but to get to the true figure you need to strip out the route marketing and contract set-up costs. I think the true EBITDA per pax is negative but let's assume £1). So airport could sell for circa £25m. What they need to do is get the per pax profit up to something in the £5 - £10 range. At the moment the target is £8 per pax profit and a target 5m pax. So £40m EBITDA x 25 = £1 billion sales price for the airport. The difficulty in growing the per pax profit is that the estate is constrained. Where do you put the car parks, traditionally a large proportion of any airport's income? How do you introduce more concessions airside when the airport building expansion is limited by the location of the ATC tower? £8 per pax when your bread and butter passenger is a cost conscious Ryanair and Easy customer will be hard to achieve. 5m pax per annum even more difficult.