Virgin May Bid For Gatwick Ownership

A team from Sir Richard Branson's Virgin Atlantic Group is in the market to bid for a major UK airport.

He has put together a consortium to raise the £2bn to buy Britain's second largest airport - Gatwick - now that the current owner BAA is selling it due to well publicised competition concerns.

However, a final report by the Competition Commission on Britain's airports industry is not expected to be published until next February and BAA's owner, the Spanish company Grupo Ferrovial, is unlikely to hear any formal interest from buyers until the report is finally released.

But, it has emerged that the Virgin Chairman Sir Richard himself has already held talks with several potential bidding partners, which reportedly includes funds backed by the Dubai royal family.

Last month it emerged that BAA was likely to sell three of its seven airports because of concerns about its dominance in the market.

The news followed initial Competition Commission recommendations that the airport operator should sell two of its three airports in the south east: Heathrow, Gatwick and Stansted.

The Commission also believes that BAA should not be permitted to own airports in both Glasgow and Edinburgh.

At the time, BAA hit back saying it has "no intention" of selling Heathrow, its largest airport.

In a statement, the Commission said: "We have provisionally found that there are competition problems at each of BAA's seven airports with adverse consequences for passengers and airlines.

"A principal cause is their common ownership by BAA."

BAA, formed in 1965, owned by Ferrovial, owns the London trio of airports, three in Scotland, and one in Southampton.

BAA handles 91% of passengers in southeast England, where overcrowding and the chaotic opening of Terminal 5 at Heathrow led UK Ministers to demand its break-up.

The CC is now seeking views on which of BAA's three London airports should be sold and similarly which of Edinburgh or Glasgow airports should be sold.

The CC said that BAA showed a "lack of responsiveness" to the needs of airlines and a "lack of initiative" over expanding capacity.

See: Commission Urges BAA To Sell Three Airports

(BMcC)