Vinci takes majority stake in £3bn Gatwick airport deal

Vinci the French infrastructure group has bought a majority stake in Gatwick airport for £2.9bn taking control of world’s busiest single-runway airport just after it was brought to a standstill by drone sightings in the near vicinity.

Under the deal Vinci will take a stake of 50.01 per cent in a Gatwick airport that handled over 46m passengers in the past year. The sale was delayed before Christmas by the drone incident, which caused over 1000 flights cancelled or diverted disrupting 140,000 passengers.

Stuart Wingate, CEO who will stay in his job after the deal said “ This is good news for the airport as it will mean both continuity but also further investment for passengers over the coming years to improve our services further”.

Existing investors like Global infrastructure Partners and Abu Dhabi Investment Authority, sold down half of their stakes leaving 21 per cent and 7.9 per cent respectively. Vinci values the airport at £6bn. The airport has paid £1.5bn in dividends since its sale in 2009 and has had operating cashflow of £2.5bn over the same period.

Vinci has 12 airports in France, 10 in Portugal, several in Japan and Latin America and has €3.2bn  in revenues in 2017 and employs around 200, 000 people. French business executive Xavier Huillard is the current CEO of Vinci SA.

In the Fiscal year to March 2018, Gatwick reported revenue of £764m.

Investors in the UK’s busiest airports received £6.7bn in dividends in the past decade, as the scale of dividends provoked criticism from some in the aviation industry given that airports are imposing higher landing charges on airlines which is passed to customers through air fares. Global Infrastructure co-investors in Gatwick, have received £1.5bn since 2010 which included £643m in 2017-18 when the airport issued £650m of debt. Gatwick which had net debt of £2.5bn in September said it did not use debt to pay dividends and had invested more than £2bn to improve facilities.

Payouts from Gatwick  with 46m passengers and Heathrow with 78m passengers  totalled last year

£4.3bn since 2011 and in 2017 investors received £847m. In February 2018 Heathrow disclosed £535m dividend to British Airways owner IAG.