Is TBI to be sold off ?

[Powerjet1]

Shares in TBI have increased by 6% today to around 75p. A report in the Daily Telegraph suggests that the major shareholders are pushing for a break up of the group which includes Luton, Belfast, Cardiff & Stockholm Skatsa. Shareholders reckon a price of 100/110p is achievable if the group is broken up, and claim they have become frustrated by the current manangement and want to see sale proceeds returned to the them. Luton is claimed to be the 'Jewel in the Crown' & recently announced expansion by easy & ryan will have helped considerably.

Can't come soon enough for my mind. Interesting times ahead!!!

[Standard Noise]

mmmmm, Ferrovial might be interested. Monopoly in the Southwest and in N.Ireland.............

[pipertommy]

What about Cardiff?

[MerchantVenturer]

Of course ther have been other rumours of take-overs of TBI in recent years but it does seem the main shareholders of the company have now become disillusioned with the way it is going and see greater value in the break-up and sale of the assets.

There is another rumour doing the rounds that a company controlled by Chelsea FC owner, Roman Abramovich, is interested in buying TBI.

pipertommy,

This is an extract in today's web 'newspaper' ic Wales report on the TBI situation.

During the six-month period (to 30 September 2004) passenger numbers at Cardiff were 4.3% lower than the previous year - with 1.16m passengers using the airport at Rhoose during the three period.

The biggest decline (10.6%) came in low-cost flights from Cardiff, following a reduction of operations at the airport by BMIbaby. But full service passenger numbers from Cardiff rose 15%.

TBI is now hoping the long-awaited rail link to Rhoose will provide a boost to the airport when it is completed next year.

"Cardiff continues to generate good levels of cash and will benefit from important infrastructure development with the opening of a new railway station adjacent to the airport in May 2005," said TBI.


Standard Noise,

Given that Ferrovial (through one of its companies Cintra) is the owner of Bristol Airport, along with the Australian Macquarie Bank, it would be an interesting concept if the same company was also to control Cardiff Airport.

When BRS was sold by First Group plc/Bristol City Council in 2000 there was speculation then that TBI might have been interested and many wondered how they would have operated neighbouring (some say rival) airports.

The same would apply to Ferrovial. Would a common owner try to rationalise flights and treat the two airports as one or still run them as mutual 'opponents'?

[Powerjet1]

Here is the gist of the article as per the Daily Telegraph.

http://www.telegraph.co.uk/money/main.jhtml;sessionid=JQFPA4PWGVN35QFIQMFCM5OAVCBQYJVC?xml=/money/2004/10/08/cntbi08.xml&_requestid=92219

[ALLMCC]

I think "Standard Noise" may have been referring to Ferrovials' current ownership of BHD - if any interest is shown by them in BFS, this would almost certainly trigger the attentions of the Competition Commission as it did in the past when attempts were made by BFS to purchase BHD.

The situation between Cardiff and Bristol may be different due to the fact that they are further apart not to mention in different countries!!

[Cyrano]

I type slowly, so ALLMCC has beaten me to a couple of these points! :(

MV:

It would indeed be interesting if the owners of Bristol airport tried to take control of Cardiff as well.

The only example I can think of offhand of two nearby airports in common ownership but with different market positioning is Verona and Brescia in Italy - the former is more scheduled, the latter more charter/low-cost, but I'm not sure how successful that split has been (and Verona and Brescia are not in different countries). Doubtless there are other examples out there.

However I think there's a more immediate issue. Surely any attempt by Cintra to take control of Cardiff airport would be subject to referral to the Competition Commission?

I'm no expert but according to the Competition Commission site (http://www.competition-commission.org.uk/our_role/what_investigate/mergers.htm) :

A relevant merger situation is created if one of the following thresholds is met:

the value of the UK turnover of the enterprise acquired (or to be acquired) exceeds 70m (the turnover test); or

the share of supply of goods or services in the UK or in a substantial part of the UK held (or to be held) by the merged enterprise is at least 25 per cent (the share of supply test).

The text then goes on to discuss the reduction in competition which could ensue.

Whatever about the £70m turnover (may be true; I don't have the figures to hand), I dare say it would be easy to make the case that BRS and CWL combined would represent more than 25% of the seats available from the South West and S Wales.

What do you think?

C.

[nickmanl]

tbi can't actually sell off Luton airport as they don't own it!

TBI only run the airport on behalf of Luton Borough Council.

[MerchantVenturer]

Cyrano,

I'm not an expert either but I think there is no doubt that BRS and CWL already account for 25% of the available seats in S Wales and SW England - individually, let alone jointly.

The latest CAA stats show the following rolling totals for the year ended August, 2004.

BRS - 4,386,000
CWL- 1,898,000
EXT - 527,000
NQY - 165,000
PLH - 90,000
SWS - 15,000

I know this is the number of pax, not seats available, but I'm sure you get the picture.

BTW, I've left out BOH because, although Bournemouth/Poole are in the government's south west region, I don't think many people look upon them as being other than south coast. BOH's total is 490,000.

Southampton is not in the government's south west region.