The new owners of Edinburgh airport are taking over at a time when aviation in Scotland faces “multi-faceted challenges”.
Welcoming the £807 million deal by Gatwick and London City airport owner Global Infrastructure Partners, Scottish Passenger Agents Association president Kevin Thom urged continued investment at Edinburgh.
Following announcement of the sale by BAA as part of a disposal programme ordered by the Competition Commission, Thom said:
“Commercial aviation in general, and not least in Scotland, is facing severe and multi-faceted challenges right now – with excessive taxation of travellers via APD; confusion in government over future aviation policy, and of course an understandable degree of uncertainty regarding Anglo-Scottish air services following the acquisition of BMI by British Airways owner IAG.”
However, he said GIP had demonstrated its willingness to invest in and improve its “vital UK aviation assets” by expanding runway and passenger services capacity, and improving check-in and security efficiency.
“We are hopeful that they will follow the same pro-active course with Edinburgh, and take the long term view when it comes to retaining ownership for the future,” said Thom.
“Edinburgh airport, which has enjoyed considerable success under the ownership of BAA – introducing new routes, growing passenger throughput and winning a number of awards – can, we believe, go from strength to strength during a period of stable ownership and sustained investment by GIP.
“Hopefully, this will mean continued growth of its route network and passenger services; and an ever more significant contribution to Scotland’s economy in general, and inbound and outbound travel sectors in particular.
“We will be urging our members in the east [of Scotland] and their clients to support Edinburgh’s wide range of routes and services to the maximum.”
Constantinos Orphanides, of PwC airport valuations group, responded to the sale by saying: “Edinburgh airport is an attractive asset which has demonstrated passenger traffic resilience and which offers further upside from commercial yield improvements.
“The reported £807 million Global Infrastructure Partnership deal implies an enterprise value to EBITDA transaction multiple of close to 16.1 times which is in line with what we’d expect for a high growth UK regional airport like Edinburgh.
“While this multiple is still well below the airport valuation multiples observed in their 2008 pre-recession peak, the price beat market expectations and hence reinforces the continued demand for quality UK infrastructure assets.”
GIP chairman and managing partner Adebayo Ogunlesi said: “Edinburgh airport is a high quality infrastructure asset. Its acquisition is a landmark deal for GIP.
“We see significant opportunity to apply our tested and successful operational expertise and our knowledge of the global airports sector to develop and enhance the performance of Edinburgh airport in years to come.”
Michael McGhee, the GIP partner leading the acquisition, added: “We plan to work closely with the airlines to improve customer service and quality in a similar fashion to the strategy we are successfully executing at our existing UK airports London Gatwick and London City.
“We expect to continue to develop Edinburgh airport into an attractive and efficient capital city gateway by improving the experience of our passengers, business and leisure alike.”
Colin Matthews, chief executive of BAA, said: “Edinburgh Airport and its team have been part of BAA for a long time and we are proud of its achievements. We wish the new owners every success and are confident the airport will continue to flourish. BAA will continue to focus on improving passengers’ journeys at Heathrow and its other airports.”
The sale is expected to close by the end of May.
A spokesman for JP Morgan Asset Management, said: “While we are disappointed at the outcome we wish the new owners and all concerned with Edinburgh airport well.”