Global Infrastructure Partners (GIP) has completed the sale of London City Airport to a consortium of Canadian pension funds – Ontario Teachers’ Pension Plan, Borealis Infrastructure and AimCo – as well as Kuwait-owned infrastructure investment company, Wren House. The syndicate is understood to have narrowly beaten two other bids, one from the Chinese HNA Group and a rival Canadian consortium led by pension fund PSP Investments. The airport was offered for sale last August by its US private equity owner GIP which had itself acquired the facility in 2006 for an estimated £750m.
A spokesperson for the consortium commented: “London City Airport is a premium infrastructure company, operating in a very attractive market. We look forward to working closely with the airport’s strong management team to achieve the business’ full long-term potential.”
The winning consortium is no stranger to the aviation sector. It has a proven track record of ownership and airport operations and has gained valuable experience at other UK and European airports – Belfast International, Birmingham, Bristol, Brussels and Copenhagen – as well as historical involvement at both Rome and Sydney.
Although there has been no confirmation of the actual price paid by the consortium, industry observers believed the airport to be worth around £2bn. However, this valuation has proven controversial with airlines operating from London City. Willie Walsh, CEO of International Airlines Group (IAG) – parent of largest incumbent British Airways – told London-based press it was a “foolish price” and has threatened to withdrawal most of the carrier’s aircraft if the new owner raises airport charges to cover the high acquisition cost.