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I, for one, welcome our new private equity fund overlords

October 22nd, 2009 · Posted by Skuds in Life · No Comments · Life

I’m feeling a bit sorry for the Crawley Observer.  It hit the streets today with a story on page 19 (right next to the one with the wonderful headline of ‘The squirrel whisperer’) about Gatwick airport.  The headline was “Gatwick sale could take some time yet” and it started by saying:

BAA’s owners have scotched rumours that the sale of Gatwick Airport could be imminent.

Before I had even opened the paper there were headlines on the screens at work, which display a tickertape of the BBC RSS feed, saying that the sale of Gatwick had been agreed. Oops 🙂This could be a good thing for Gatwick and consequently for all the local businesses that are dependent on it one way or another.  BAA have never really made any secret of the fact that they see Heathrow as their flagship, and it has always been obvious that Heathrow is their priority.

This is not just about expansion, but also about contraction.  With falling demand for air travel, you just know BAA would want to make sure Heathrow kept its critical mass and so would make sure that Gatwick suffered more.  At the very least it has always seemed to encourage the impression that Heathrow is for serious business travel and Gatwick is for lower-priced, lower-margin holiday flights.

In other words, exactly the sort of monopolistic, anti-competitive behaviour that led to the demand for BAA to sell off some of its airports.

This may mean that the new owners of Gatwick will press for a second runway, even if Heathrow and Stanstead build new runways – BAA would have hated the idea of a new runway at Gatwick if it made another one at Heathrow less likely – but that is another matter, and probably not a pressing issue the way civil aviation is at the moment.

What it could mean is that Gatwick will actively try and get more operators to shift routes from Heathrow which would be a boost here, and may even lead to a more balanced division of air traffic, which in turn could lead to less demand for an extra runway altogether.

Or not.  What do I know?   Whatever GIP’s agenda is for Gatwick at least it will not be such a hidden one.

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