London City Airport sold for £2bn
London City Airport sold to Kuwait Investment Authority, a state-owned Sovereign fund, Borealis Infrastructure, Ontario Teacher’s Pension Plan fund, AIMCo, an American investment management company, Wren House, an infrastructure investment vehicle owned by Sovereign wealth fund of Kuwait.
Global Infrastructure Partners (GIP), the American private equity company who owned 75 per cent stake, and Oaktree Capital who owned the other 25 per cent, sold the airport, it had purchased about 10 years ago from Irish entrepreneur Dermot Desmond for £750m. GIP also owns 42 per cent of Gatwick Airport and Edinburgh Airport.
In November 2015, GIP with Credit Suisse, the Swiss based investment bank appointed for the sale of this airport, the interested bidders included Hong Kong billionaire Li Ka-Shing and HNA, the Chinese Aviation Company.
The Ontario Teachers’ Pension Plan, who already owns five European airports including Bristol and Birmingham, also owns high-speed rail link between London and the Channel tunnel.
Passenger traffic at the London City Airport at Canary Wharf, in the London Borough of Newham, 6.9m east of the City of London, developed by Mowlem, the engineering company in 1986-87, has a single 1500 metre (4,900ft) runway and a CAA Public Use Aerodrome Licence (number P728), and which largely serves a clientele of business executives, has doubled from 2 million in 2005 to 4.3 million in 2015. The largest aircraft which can be used at the airport is the Airbus A318. It is the fifth busiest airport in passengers and aircraft movements serving London after Heathrow, Gatwick, Stansted and Luton and the 13th busiest in the UK.
The sale goes against British Airways Willie Walsh, chief executive of BA’s owner IAG who recently dismissed the £ 2bn valuation as “foolish”, as he wanted BA to pull out its operation to elsewhere should any potential buyer attempt to increase landing charges to cover the cost of its purchase.