BAA throws in towel on Stansted

The Ferrovial-backed airports operator has finally agreed to comply with the UK Competition Commission’s demand that it sell Stansted Airport. BAA had appealed against the decision seven times and had been expected to carry on the fight.

After a long-running battle with UK authorities, Ferrovial-owned airports operator BAA has decided to concede defeat by selling Stansted Airport, the third-busiest airport in London and fourth-busiest in the UK.

BAA’s seventh appeal against the Competition Commission’s decision to force it to sell Stansted was rejected in the UK’s Court of Appeals last month. It was thought likely that BAA would continue its extraordinary fight by taking the case to the Supreme Court.

But in a statement earlier today, BAA said: “Having carefully considered the Court of Appeal’s recent ruling, BAA has decided not to appeal to the Supreme Court and is now proceeding with the sale of Stansted Airport.”

However, BAA could not resist one last dig at the original decision, saying: “We still believe that the Competiiton Commission ruling fails to recognise that Stansted and Heathrow serve different markets.”

It was back in 2009 that the Competition Commission watchdog made its initial ruling that BAA should sell Stansted as well as one of its Scottish airports in order to loosen its grip on the UK airports sector. BAA went on to sell Edinburgh Airport to New York-based fund manager Global Infrastructure Partners in an £807 million (€990 million; $1.3 billion) deal in April this year.

There is likely to be strong interest from bidders in the sale of Stansted, which is located in Essex, 48 kilometres north east of central London. In February this year it was revealed that Manchester Airports Group was seeking to lure equity investment from private sources in order to add a fifth UK airport to its portfolio. Stansted was thought to be top of its priority list.

Around 17.5 million passengers and 133,500 flights pass through Stansted Airport every year. It serves 16 airlines and is a major cargo centre, with over 205,000 tonnes of cargo handled per year. The airport’s adjusted EBITDA (earnings before interest, tax, depreciation, amortisation and exceptional items) was £86.6 million in 2011.

The sale of Stansted would leave BAA with four UK airports: Heathrow, Southampton, Aberdeen and Glasgow.

At the end of last week, it was announced that Qatar Holding, a subsidiary of Qatari sovereign wealth fund Qatar Investment Authority, had bought a 20 percent stake in BAA for £900 million. Qatar acquired a 10.62 percent stake from Spain’s Ferrovial (leaving Ferrovial with 39.37 percent), 5.63 percent from Canada’s Caisse de depot et placement du Quebec and 3.75 percent from Singapore’s GIC.