Ferrovial Told To Sell British Airports, May Appeal
Spain's Ferrovial has been ordered by Britain's competition regulator to sell three of its seven British airports within two years, but the company said this may be impractical and it would consider an appeal.
The company, which bought British airports monopoly BAA for more than GBP10 billion pounds (USD$13.89 billion) at the top of the market in 2006, must now sell London's Stansted and either Edinburgh or Glasgow once it has completed the on-going auction of Gatwick, which was put on the block last year.
Britain's Competition Commission delivered the ruling in a final report on the issue published on Thursday. It said the move to have airports managed under different owners would benefit both passengers and airlines.
BAA chief executive Colin Matthews said the group would spend the next two months considering the ruling, but warned that it would challenge the order if it was deemed impractical.
"Selling one airport is one thing, selling three is another. You can't assume we will appeal... (but) we might have to if we reach the conclusion that it is simply not practical to proceed," he said.
He added that the Competition Commission analysis was flawed, and that customer service was improving across the company's airports.
Analysts have previously said the expected decision would not favor Ferrovial, which had over EUR24 billion euros (USD$31.3 billion) of debt at the end of last year.
"The value of the assets are going down, and its debt is going up. Ideally they would not want to sell the airports right now," Collins Stewart airlines analyst Andrew Fitchie had said ahead of the announcement.
BAA may keep Heathrow, Aberdeen and Southampton and either Edinburgh or Glasgow, but must sell Gatwick and Stansted to different buyers.
"We expect that the new airport owners, with the operating capabilities and financial resources to develop them as effective competitors, will have a much greater incentive than BAA to be more responsive to their customers," head of the Commission's enquiry Christopher Clarke said in a statement.
