Willie Walsh has accused Heathrow Airport of spreading “scare stories” and expertly “gaming” Britain’s regulatory system to bump up prices for airlines and passengers.
The boss of British Airways owner IAG hit out at Heathrow over claims that it will lose investors if it is not allowed to generate higher returns. He said last week’s £392m purchase by Britain’s second biggest pension scheme of a stake in the hub “blows a hole” in the airport’s arguments. The deal saw the Universities Superannuation Scheme buy an 8.65pc holding from Ferrovial, Heathrow’s top investor.
The sale was struck at a 13% premium to Heathrow’s Regulatory Asset Base – the regulator’s proxy for the airport’s value.
“Without question there is no shortage of investors who would be willing to take a stake in Heathrow,” said Mr Walsh. “It is almost insulting that they announce the sale of a stake to a significant player like USS at the same time that they have been arguing that if they don’t get excessive reward at Heathrow, investors will leave.”
Heathrow and major airlines have been at loggerheads over how much the airport should be allowed by the regulator, the Civil Aviation Authority, to charge airlines for using its facilities from next year. The landing charges are inevitably always passed on to passengers.Mr Walsh said he is talking to Gatwick and London City Airport and would be prepared to move planes to rival airports in protest.
“Heathrow are experts at gaming the regulatory system,” he said.
A Heathrow spokesman said: “There is no new capital investment for Heathrow as part of the USS transaction. One investor has sold, another has bought. Shareholders have not yet made anything approaching a market return on equity.”
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Ferrovial sells Heathrow stake to UK pension fund – the Universities Superannualtion Scheme – for £392m
Date added: October 22, 2013
Spanish infrastructure giant Ferrovial has further reduced its stake in Heathrow after agreeing to sell 8.65% of the airports group to UK pension fund, the Universities Superannuation Scheme (USS), for £392m. The USS is one of the UK’s largest pension funds and is the scheme for universities and other higher education institutions in the UK. The deal, which values Heathrow at £4.5 billion,(plus the extra value of some £10 billion in debts) is the 4th time Ferrovial has trimmed its holding in Heathrow (or BAA as it was) in 2 years. It reduces Ferrovial’s stake to 25%, down from 62% when it bought BAA in 2006 in a £10.3 billion deal. Heathrow Airport Holdings has, since 2006, had to sell Edinburgh, Gatwick and Stansted, but still owns Aberdeen, Glasgow and Southampton airports. Ferrovial will remain the largest shareholder in Heathrow following the deal with USS, which is expected to complete on Thursday. USS will hold the 7th biggest stake behind China Investment Corporation which bought 10% of Heathrow in October 2012.
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