BAA may be forced to sell TWO London airports!
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To clarify, I believe that BAA is owned by a consortium. Other than Ferrovial, I think that the Quebec or Ontario Teachers' Pension Fund may be involved (I'm too lazy right now to check!) plus at least one other. Could be wrong, though...
P.S. Why is there only one Competition Commission
?
P.S. Why is there only one Competition Commission
?
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Persons willing to tie up capital in (Air)Ports and to embrace the ongoing drain, pain and fuss, do so out of no love for transport. It was the commercial property development potential of the space above/alongside terminals that was of interest in the unloading of the Railtrack entity. Associated British Ports was an investment proposition solely for the handling fees cashflow of containers in transit. BAA is a landlord of warehousing/retail space. The freight and warmware content of aircraft are of no investment relevance, except in being a potential liability, moaning about delays. Most landlords care not a jot for the business of their tenants, they just want their monthly stipend.
Port owners can grow revenue either by pillage of tied tenants (see BAA consistently, owned by the State, the City, or by one infrastructure-phile), or by partnering tenants to share incremental revenue from seizing market from others, and/or by creating fresh market: see every obscure Ryanair port, owned by whomsoever. Aircraft, freight and pax handling fees scarcely cover daily running expense: payoff on £NBillions capital comes from landlord's take from the shopping Mall. If A.N.Other were to takeover LGW that of itself would benefit tenants and cargo/pax Users not one tittle. Nor would the mere act of dividing ownership of clutch ports.
Better, cheaper facilities is what we all want, and won't get until and unless a Buyer cares to pour in more investment for later/slower return, and/or manage it more User-friendly than Ferrovial. Why do you assume, say, MAN Authority's shareholders would settle for a lower hurdle rate on their capital? F won in 2006 precisely because they modelled lower yield than did other Bidders.
We can't undo Ports privatisation because the bow-wave of impending investment equates to measurable pennies on income tax. We do not vote for tax increases. We could have a User co-operative (see NATS, the CRSs) if the carrier industry had ample capital capacity. So, F will unload burdensome dross and enjoy LHR's ongoing revenue with little net acquisition capital. Who's a clever boy, then?
Port owners can grow revenue either by pillage of tied tenants (see BAA consistently, owned by the State, the City, or by one infrastructure-phile), or by partnering tenants to share incremental revenue from seizing market from others, and/or by creating fresh market: see every obscure Ryanair port, owned by whomsoever. Aircraft, freight and pax handling fees scarcely cover daily running expense: payoff on £NBillions capital comes from landlord's take from the shopping Mall. If A.N.Other were to takeover LGW that of itself would benefit tenants and cargo/pax Users not one tittle. Nor would the mere act of dividing ownership of clutch ports.
Better, cheaper facilities is what we all want, and won't get until and unless a Buyer cares to pour in more investment for later/slower return, and/or manage it more User-friendly than Ferrovial. Why do you assume, say, MAN Authority's shareholders would settle for a lower hurdle rate on their capital? F won in 2006 precisely because they modelled lower yield than did other Bidders.
We can't undo Ports privatisation because the bow-wave of impending investment equates to measurable pennies on income tax. We do not vote for tax increases. We could have a User co-operative (see NATS, the CRSs) if the carrier industry had ample capital capacity. So, F will unload burdensome dross and enjoy LHR's ongoing revenue with little net acquisition capital. Who's a clever boy, then?
Last edited by tornadoken; 18th Aug 2008 at 09:53.
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The reason for the break up of BAA is simple- and was highly forseeable too btw.
Although the 'old' BAA (ie pre-merger) was arguably a monopoly, Ferrovial already owned a couple of UK airports at the time it approached BAA. I think SOU was one, can't remember the other.
Put the two together and all doubt about it being a monopoly was removed. QED todays breakup.
They might have got away with it if they'd flogged their existing UK airports at the time of the merger thus preserving the status quo at least.
But 'oh, no..............'
Point 2. Up here in Scotland GLA is widely tipped as most likely to get sold.
Big mistake on two counts.
(i). Most of the population live in/ around Glasgow. GLAs behind EDI at the moment, but when things pick up again, as they will..........
(ii). If the point of the sell-off is to promote competion, selling EDI will do more to that end as GLA is already-and unlike EDI-competing with another airport. If GLA fell into the hands of the same folk who own PIK, the situation could be almost as bad as it is now.
Although the 'old' BAA (ie pre-merger) was arguably a monopoly, Ferrovial already owned a couple of UK airports at the time it approached BAA. I think SOU was one, can't remember the other.
Put the two together and all doubt about it being a monopoly was removed. QED todays breakup.
They might have got away with it if they'd flogged their existing UK airports at the time of the merger thus preserving the status quo at least.
But 'oh, no..............'
Point 2. Up here in Scotland GLA is widely tipped as most likely to get sold.
Big mistake on two counts.
(i). Most of the population live in/ around Glasgow. GLAs behind EDI at the moment, but when things pick up again, as they will..........
(ii). If the point of the sell-off is to promote competion, selling EDI will do more to that end as GLA is already-and unlike EDI-competing with another airport. If GLA fell into the hands of the same folk who own PIK, the situation could be almost as bad as it is now.
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Question - If STN gets sold to Ryanair, how is that increasing competition? You would only benefit if you flew Ryanair because I can't see them selling decent slots to anyone else! Welcome to Ryanair International...
God help us.... but then I live South of the River so I don't have to go there!
God help us.... but then I live South of the River so I don't have to go there!
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Sold to Ryanair?
BAAADM:
"I believe selling of Stn as well as Lgw is the way to go . and IF Ryanair were to bid..and win ..you would see a signifcantly better Airport in the long term..more efficient, cost effective and user friendly"
I think the competition watchdog would have something to say about one of the main airlines owning the airport.
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From the news right now:
A big auction coming... 
Airports operator BAA, owned by Spain's Ferrovial, received a tougher-than-expected ruling from the competition regulator on Wednesday, which said it should sell two of its three London airports because of problems created by its near monopoly.
Along with two of its London airports -- Heathrow, Gatwick and Stansted -- BAA should sell either Edinburgh or Glasgow, cutting its portfolio of British airports to four from seven, the Competition Commission said on Wednesday.
Along with two of its London airports -- Heathrow, Gatwick and Stansted -- BAA should sell either Edinburgh or Glasgow, cutting its portfolio of British airports to four from seven, the Competition Commission said on Wednesday.
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Ryanair won't get STN.
MOL would love to have it, but I would love to have LGW and guess we both stand about the same chance of getting it!
The competition commission would put the brakes on it faster than you can say 'to be sure!'
My money is on MAN going for LGW. They would do a good job too!
MOL would love to have it, but I would love to have LGW and guess we both stand about the same chance of getting it!
The competition commission would put the brakes on it faster than you can say 'to be sure!'
My money is on MAN going for LGW. They would do a good job too!
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VA would NEVER move their ops to STN. It does not make sense. 40 minute train journeys on a crappy train from a crappy station? No way. LGW perhaps, if the new owner (if any) were to make improvements that made VA happy. With all the investment into the dedicated VA terminal at T3, it wouldn't make sense to up and move to the sticks in Essex.
mattcam, we'll find out in April when the final recommendation is made.
S.
mattcam, we'll find out in April when the final recommendation is made.
S.
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My understanding is that if BAA choose to keep LHR, they must sell STN and Gatwick. If they sell LHR, they can keep the other two. Hence the reason why the CEO of BAA was using the argument over competition from abroad, not the UK. They still have 2 more months to influence the decision.
I would expect one of the Middle Eastern Sovereign Wealth Funds would buy one the London airports. Perhaps they would make an offer for LHR BAA can't refuse.
I would expect one of the Middle Eastern Sovereign Wealth Funds would buy one the London airports. Perhaps they would make an offer for LHR BAA can't refuse.
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Break up of BAA
LONDON, England (CNN) -- Britain's competition watchdog said Wednesday that airport operator BAA should sell three of its seven airports, including two in London.
BAA urged to sell three UK airports - CNN.com
What are the views of the chaps and chapesses who sit up the front pointy end of the aircraft?
BAA urged to sell three UK airports - CNN.com
What are the views of the chaps and chapesses who sit up the front pointy end of the aircraft?
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You might, but international travellers won't. The ones that do are either restricted by funding or are already so demoralised by the airport arrivals experience that they don't care.
If Stansted Express was cleaned up and redone with faster timing, and Liverpool Street was cleaned up from the dingy look, my view might change. Victoria is a great ending for the Gatwick Express, even if Gatwick Airport is not the most fabulous.
S.
If Stansted Express was cleaned up and redone with faster timing, and Liverpool Street was cleaned up from the dingy look, my view might change. Victoria is a great ending for the Gatwick Express, even if Gatwick Airport is not the most fabulous.
S.
