David Bentley - Articles and news items
Issue 5 2012 • 2 October 2012 • David Bentley, Airport Finance Analyst and Writer
Thirty-three years after the first privatisation of an airport in Europe, this article examines how the nature of the investors is changing.It seems that the Initial Public Offer (IPO) – which was the chosen method for BAA’s privatisation – kick-started a wave of other full and partial IPOs on airports throughout Europe, including Vienna (1992), Copenhagen (1994), and Rome (1997), moving over to Auckland (1998) then Malaysia (1999), Zurich and (surprisingly at the time) Beijing (2000) and Frankfurt (2001). All these public issues were on substantial primary level airports, many of whose operators were becoming involved in ‘group’ activities, having themselves invested in other airports – often in different continents – through any one or more of a growing variety of means such as leases, concessions, trade sales, the many Build Operate Transfer (BOT) derivatives and Public Private Partnerships (PPP).In many ways it was a golden era. It could be argued that the privatisation of the unwieldy BAA was botched, that it might have been better to split it up then as it is being broken up right now, and of course it was de-listed anyway in 2006 when it was bought by a Ferrovial-led consortium. By and large though, the IPO has been a successful privatisation method. None of the other airports mentioned have substantially changed their ownership structure, even if the actual distribution of equity has varied significantly and investor returns are considerably better than they might expect from the airlines.