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Airportman

September 19th, 2008 · Posted by Skuds in Life · 1 Comment · Life

BAA’s enforced sale of Gatwick is going to make for some interesting and uncertain times in the area.  The BBC were carrying a story today about Horsham-based NOGAR campaigning to fight an additional runway, and I’m sure that GACC will be in the news before long. I don’t really have the attention span to say anything coherent about it all at the moment, but here are some odd thoughts…

NOGAR are right that anyone buying Gatwick will want to add a runway if they can.  BAA really did not want to have an extra runway -I think their overall plan depends on Heathrow having the sort of size and capability to compete with Frankfurt, Schipol and Roissy so they always favoured expansion there and saw expansion of Gatwick as a threat to that.  It was not in BAA’s interest for Gatwick to steal business from Heathrow, but it will be entirely in the interests of a new owner to compete for passengers with Heathrow.

There is a lot of talk about the notorious 2019 agreement.  Both councils (county and borough) have talked about wanting to extend it.  Any new buyer would never do that voluntarily.  BAA could possibly do it to protect them from future competition, but that would make Gatwick far less attractive and drop the price a lot.  With the way things are today BAA will want as much as they can get from the sale.  2019 is now not so far away.  By the time a sale goes through it will only be 10 years before someone could start building one, and only five or six years before they could start the planning.

A so-called close-parallel runway within the current boundaries of the airport might not be too bad, but no operator would want it because it would be hugely expensive with only a relatively small increase in capacity.  It would effectively kill off any chance of further runways so for the local area it would be a case of having up to 50% increase in passengers against a 50% chance of a 100% increase.  Whether you favour it would depend on your approach to gambling.

The timing of the sale is unfortunate.  It makes the ideal solution totally impractical – for Crawley council to buy the airport.  Seriously.  Other local authorities run airports, the most prominent example in the UK is Manchester.  On the plus side, the council would have control of expansion if it owned the airport, and BAA would be really pleased to sell to somebody who didn’t have plans to compete with Heathrow.  As a profitable business it could even subsidise the council’s services.  One tiny little barrier is that slthough Crawley council is very, very well-off by the standards of councils, with something like £100million in the bank that is still about £1.9billion short of the asking price.

That is why the timing is unfortunate.  In happier times the council could conceivably have borrowed enough to buy Gatwick and then used the operating profits to pay off the loan.  In happier times it would even have been possible to raise that sort of money, but this is not the time to expect those sort of sums to get lent, especially when the aviation industry is a bit flaky so the returns are far less certain.  Joining a consortium would be more feasible, but the types of organisation that would be interested in that would also be interested in expansion.

Maybe the timing is not so unfortunate after all…  Imagine if the council did operate the airport…  at some point it would end up relying on the income, like it used to rely on the business rates from the airport but on a bigger scale.  If Heathrow started taking the market share then you could end up with the council needing expansion but not wanting it.  So, probably not such a good idea then, but you have to admit it would be interesting.

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One Comment so far ↓

  • skud's sister

    Our local council recently sold off their share in Leeds-Bradford airport. Not sure why they decided to get out but we are a little disappointed that they aren’t putting much of the money into green projects…