Infratil puts two UK airports up for sale

The New Zealand infrastructure investment firm announced during an ‘investor day’ presentation yesterday that it plans to sell Prestwick Airport, near Glasgow in Scotland, and Manston Airport in Kent, England.

At an investor day yesterday, New Zealand infrastructure investment firm Infratil said it planned to sell “underperforming assets” such as Prestwick Airport near Glasgow, Scotland, and Manston Airport in the English county of Kent. PwC has been appointed as an adviser on the sales.

Prestwick Airport, which is 45 minutes by rail from the centre of Glasgow, claims to handle “more air freight than all the other Scottish airports put together”. It has a terminal capacity of 3 million passengers, which it says is “easily and cost effectively expandable” to more than 10 million.

The airport is also home to two low-cost carriers, Ryanair and Wizz. However, Ryanair has increasingly moved business to Edinburgh Airport in recent years, contributing to a decline in passenger numbers. In July 2011 Prestwick had a total of 156,700 passengers, compared with more than 230,000 during the same month in 2007 and 2008.

Infratil acquired Prestwick for £33.4 million (€40.0 million; $52.4 million) in 2001. The airport had previously been put on the market by UK airports operator BAA in 1991, before being sold to Canadian businessman Matthew Hudson the following year. It was then owned by UK transport group Stagecoach from 1998 to 2001.

Manston, which is based on the east Kent coast near Ramsgate, has a recently refurbished terminal which can handle up to 700,000 passengers per year. The airport suffered a blow when airline Flybe announced it would be scrapping its flights from Manston from March 25th. However, PwC partner Coolin Desai told the BBC that Manston represented “a strategic opportunity for an investor in light of the well documented congestion affecting all major airports serving London and the South East”.

Wellington-based Infratil, which was one of the world’s first listed infrastructure funds when it joined the New Zealand Stock Exchange in 1994, has a 66.7 percent stake in Wellington International Airport and is also developing a new commercial airport at Whenuapai  near Auckland. Infratil also has interests in energy, public transport and property. Infratil is managed and administered by HRL Morrison,  the investment manager with offices in New Zealand, Australia and Hong Kong.  

The Prestwick and Manston sales announcement comes amid a rash of activity involving UK airports. Last month, Manchester Airports Group said it was seeking private investment to try and add a fifth UK airport – thought to be Stansted – to its portfolio. In the same month, Luton Airport owner Luton Borough Council said it was seeking to double passenger numbers at the airport – putting it on a collision course with Abertis, the airport’s operator.

Meanwhile, there is strong interest in the sale of Edinburgh Airport, for which an information memorandum was sent to interested parties on January 17. Carlyle Group, Global Infrastructure Partners and Borealis Infrastructure were among those named as possible bidders in press reports.