COUNCILS KEEN TO TAKE SHARE IN BID FOR GLASGOW AIRPORT
22 August 2008
DAVID LEASKCOUNCILS in the west of Scotland are looking at teaming up with a major operator to buy Glasgow Airport.
Sources last night confirmed "discreet negotiations" had taken place between the political leaders of local authorities and officials from Manchester Airport Group (MAG), which The Herald yesterday revealed as a likely bidder for the airport.
The publicly owned Manchester group was the first potential buyer to break cover after the UK's competition watchdog signalled it would like to see current owners BAA sell either Glasgow or Edinburgh airports.
Industry insiders stressed a virtual "for sale" sign has appeared outside the Abbotsinch campus, although this is denied by Spanish-owned BAA. The Herald understands the leader of Glasgow City Council, Steven Purcell, and his chief executive, George Black, have been involved in talks with MAG.
One senior source said: "This is a fantastic asset that is vital to the future of this city region. There is cross-party and crosscouncil agreement that we need to be talking to all the potential bidders. We have not ruled out taking an equity interest in the airport."
MAG executives have made clear they would not rule out some kind of equity partnership with the Scottish public sector to buy Glasgow Airport.
The group, which, aside from Manchester, owns three other regional airports in England, believes Glasgow is a good "fit" for its portfolio.
It has formally put together a team to investigate a bid for the airport, which potential buyers have valued at anything from GBP500m to GBP700m. BAA insiders reckon the business is worth more than GBP1bn. That figure, however, could fall if BAA are formally forced to sell the airport by the Competition Commission. The watchdog's preliminary findings yesterday said it believed the company's continued ownership of both airports in the Central Belt of Scotland was bad for customers, both airliners and their passengers. It will make a final ruling on the issue next year.
MAG's director of group external affairs, Jonathan Bailey, has told The Herald his company would not rule out an equity partnership with Scottish authorities. A publicsector bid for Glasgow Airport - even an alliance of MAG and west of Scotland councils - may prove more politically attractive than some other potential bidders.
SNP back bencher in Holyrood, Jamie Hepburn, earlier this week called for one of the two airports to be brought into public ownership.
Business leaders privately stress that their main concern is that any future owner of Glasgow would have the financial wherewithal to continue investing after spending hundreds of millions on the asset. MAG maintains it can fit that bill. Yesterday it made it clear it could improve service at Glasgow, cutting queues and providing a greater range of flights.
Councils, however, would definitely be the junior partner in any joint bid.
But an equity investment would ensure they always had a seat on the board of the airport, which was originally built by the old Glasgow Corporation.
©2008, Newsquest Media Group
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