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17 September 2008

Gatwick Airport is for sale

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by Lin Freestone

Gatwick Airport is for sale

Gatwick Airport has been placed on the market by its owner, BAA. The decision to sell is the result of a Competition Commission ruling that BAA should sell up to three of its UK airports because of market dominance concerns.

Based in Sussex, Gatwick is the world’s busiest single-runway airport and is used by 35 million passengers per year.

Gatwick Airport began life as a small flying club in 1930. During the Second World War, the airport was requisitioned by the Air Ministry for use by the RAF. Its area was later extended by further requisitioning to include part of Gatwick Racecourse.

In 1952 the government gave approval for the proposed development of Gatwick as an alternative to Heathrow. The airport closed in 1956 and building began on what was called the new London Airport. It cost £7.8m and took two and three-quarter years to build.

The terminal was doubled in size and two more piers were built in 1958. Construction began on the new northern runway in 1985 for use in emergencies, and the £200m North Terminal was opened in 1988, which has since been extended to include more shops and restaurants. Total retail space at the airport is currently 28,000 sq m.

Regulators have valued Gatwick Airport at £1.8bn. The management has a unique legal agreement with West Sussex County Council and Crawley Borough Council to protect local communities from the impacts of future airport growth. The rail and road links to the airport are good, but there is a belief that Gatwick has been deprived of funds for decades and the place has become quite shabby as a result.

Potential bidders include Australian bank Macquarie, Manchester Airport Group, and German airport investor Hochtieff. Virgin Atlantic has also confirmed that it would be interested in joining a consortium of bidders.

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