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Ferrovial set to sell off £1.3bn Budapest Airport

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Published Date: 12 October 2006
THE new Spanish owner of Edinburgh Airport operator BAA is to sell off Budapest airport - just ten months after BAA paid £1.3 billion for it in a fiercely fought bidding war.
Ferrovial, which snapped up BAA in June, has struck a deal to dispose of Budapest's Ferihegy Airport to German construction group Hochtief for almost the same price.

Hochtief lost out on winning the airport in last December's auction and threatened to sue Hungary's APV privatisation agency, claiming BAA had not met all of the requirements.

The deal is subject to approval by Hungary's government.

At the time of the deal, BAA pledged to invest around £170 million in the airport - a figure which Hochtief will have to match to win over Hungary's ministers. When Ferrival bought BAA for £10.1bn, it made it clear it considered the firm's assets as non-core businesses.

Budapest is not the first airport to change hands this week as Celtic majority shareholder Dermot Desmond yesterday disposed of London City to a consortium led by US insurer AIG for an estimated £700 million.

Billionaire Mr Desmond bought the Docklands airport for just £23.5m in 1994.



Page 1 of 1

  • Last Updated: 12 October 2006 9:11 AM
  • Source: Edinburgh Evening News
  • Location: Edinburgh
  • Related Topics: Scotland's airports
 
1

Ricky,

12/10/2006 18:12:14

Edinburgh airport to RBS next . . . keep it here!

2

Ricky,

It’s hot round here. 12/10/2006 18:58:28

Agreed Bill - What if?

. . . RBS could take the Airport just to compliment their world headquarters - they could write off their current loan to Ferovial, the approximate value of the airport - trim back the Edinburgh Airport Staff and employ more affordable migratory European work forces, then recoup the cost as they fly home - invest the savings in automation and new technologies - possibly including driverless train systems similar to what has just been anounced for heathrow, to shuttle business execs, baggage, other passengers etc.

Could be good for the economy forcing wages down, gaining additional property on the repo front etc.

Then eventually if they get to the top of the financial pyramid - making everything worthless, we all start all over again - that’s how it works in the long term I think- Ha! Ha!

. . . nah! these things don’t happen

3

Marianne,

Colinton 12/10/2006 23:09:32

#3. Thanks for the injection of a bit of much needed reality Bill. If GLA or EDI are to be sold off it will be EDI. The GLA masterplan shows a second terminal is planned for GLA, a second international pier and a rebuilt and expanded new East pier (4 piers in total).

BAA Scotland know which airport they want to hang onto and develop, their transatlantic gateway serving the country's largest city. The GARL and Crossrail will be built, opening up GLA to the whole of Scotland.

No matter how much bleating and denial comes out of Livingston (from someone who probably rarely flies ANYwhere) the reality is market forces decide and the biggest city (by far) of the country has more clout than the second biggest city, even if it is the seat of government.

EARL will be scrapped and another scheme will likely emerge to link EDI to the rail network (eventually), but it certainly won't be EARL (that is as dead as a dodo).

EARL is giving BAA a giant headache and they want shot of it, and if push comes to shove it won't be Scotland's long haul gateway that'll be sold off, it'll be EDI.

BAA are not going to pull out of the country's major centre of population. The GLA masterplan makes that very clear.

Anyone who believes otherwise and thinks GLA is declining and will be flogged off is in denial. Glasgow is booming, it is undergoing the greatest amount of regeneration since Victorian times and the population (both within the narrow 'city boundary' and the wider Greater Glasgow area.

It is Scotland's major city and BAA have no intention of abandoning London....or Glasgow.

Fact.

4

Marianne,

Colinton 12/10/2006 23:27:50

....and the population (both within the narrow 'city boundary' and the wider Greater Glasgow area) is now growing, for the first time in many decades.

In reality Glasgow is a city of 1.7 million and like Manchester, it's 'official city boundary' shows a misleading, smaller than it actually is official population count (Glasgow: 577,000 and Manchester: 435,000, Edinburgh: 450,000).

There is no way that Manchester is 'smaller' than Edinburgh, just dodgy, narrow official city boundaries, the same as Glasgow has (for political reasons) making it appear so.

BAA are not going to get shot of GLA! That's just the way it is.

5

Graeme F,

Edinburgh 14/10/2006 13:17:23

Diana (#6) I fail to see how you can credit Bill (#3)with injecting reality into this discussion when he seems to be under the impression that Edinburgh Airport is about to be removed from the equation! Nothing could be firther from the truth, if, like me, you have read BAA's Master Plan for the airport.

What's becoming clear is that Scotland now has TWO transatlantic gateways. Edinburgh now has flights to New York, Toronto and Atlanta. Furthermore Glasgow's transatlantic market has recently suffered from the loss of a Air Canada to Toronto, American Airlines to Chicago, and in the last few days it transpires that Las Vegas and Barbados flights are being dropped too. The Glasgow-Philadelphia service is also in serious decline and in danger of being scrapped - it's reckoned to be US Airways' worst performing route in Europe.

By contrast BAA are expecting a growth of international services at Edinburgh, and some of that will indeed be long haul. They also reckon Edinburgh has the potential to be handling 2m passengers a year more than Glasgow by 2030. Edinburgh is already BAA's most profitable airport in Scotland, and there is absolutely no prospect of Ferrovial dumping it in favour of Glasgow, which is currently bleeding money, airlines and passengers! The experts agree that Glasgow is the weakest link in Scotland.

Re-visiting tired old arguments about city boundary sizes is pointless. They have zero to do with predicting airport demand. The fact is that Edinburgh will very soon be taking its place as Scotland's busiest airport. As Scotland's tourist and business gateway - and the economic powerhouse of our small country - its airport has an extremely bright future ahead of it.

The reality is that many airlines don't give a hoot about which city is the largest, they look for where the demand is, and the fact is that many airlines see Edinburgh as where the money is in Scotland. Just ask Delta Airlines, Continental Airlines, British Airways

6

D. Graham,

Glasgow 15/10/2006 15:35:14

Edinburgh plane spotter #8, as usual your type are predicting the decline of Glasgow Int airport when nothing could be further from the truth. The 'facts' that you quote are utter rubbish - like our country's BIGGEST airport bleeding money. Or how about the Barbados and Las Vegas flights being dropped? All wishful thinking from our east coast neighbours. Glasgow Int is is currently making a healthy profit and the above routes mentioned are in fact going ahead. Reading the comments on any airport article the underlying feeling from the east coast contributers is more than just resentment for Glasgow's aiports, but clearly some of you are still bitter about Glasgow's status as the economic powerhouse of Scotland, not to mention the home to half of Scotland's population. And let's not forget Edinburgh's status, yes as our 'capital' (historically) but more so as a mickey mouse tourist town.

7

Graeme F,

Edinburgh 15/10/2006 19:58:33

James (#9) - I'm afraid it is a fact that Glasgow Airport fails to generate as large a profit for BAA as Edinburgh does. Fact!

It is also a hard fact that in the January to September 2006 period, Edinburgh International Airport grew by 114,200 passengers compared to the same period in 1995, resolving to an average increase of just under 12,700 per calendar month.

Abbotsinch Airport recorded a decline of 11,100 for the same period. This resolves to an Abbotsinch decrease of just over 1,230 per calendar month (Source: BAA)

Glasgow is yesterday's airport. Prestwick has stolen all the west coast European business, and Edinburgh is leading the way for the east coast.

And I'm afraid you are wrong about the Flyglobespan routes to Las Vegas and Barbados. These have definitely been canned due to poor demand. Clearly Flyglobespan are discovering that the road to Abbotsinch is not paved with the gold which the plane spotters of Glasgow think it is!

And no matter how many times you claim the economic powerhouse of Scotland for Glasgow, the economic reality is that it is not! Edinburgh is clearly that, and in terms of business class passengers at airports it's quite apparent where the airports consider the business demand to be. British Airways couldn't make flights from Glasgow to London City Airport work and ended up switching them to Edinburgh. Equally Delta Airlines chose to launch their inaugural Scottish service from Edinburgh because they knew that business class yields are higher! A hard fact which may sit uncomfortably with you, but that's life.

As for your opinions on the attractiveness of Edinburgh as a toursit destination .. well, you're entitled to your view, but the majority of tourists politely beg to differ with you. Please deal with it!

8

Graeme F,

West Calder 15/10/2006 20:23:10

Poor James (comment 9). Apart from the fact that his maths skills are so jumbled that he thinks half of Scotland's 5m population lives in Glasgow!! - he seems to be under the impression that his favourite city (and therefore its airport) lies at the centre of the universe.

And shame on Greg for rising to the bait!

The fact is that Scotland's two biggest cities are jointly the economic engine of Scotland. But while you two men argue it out over which urban sprawl is the more important, the majority of the population of Scotland - who live in neither city - will go on laughing at you! You're both loved and both needed, so why not try and live with each other, because the simple fact is that neither could survive without the other!

9

WestCoastBiggles,

Scotland 16/10/2006 07:51:35

Well as an airline pilot working out of both airports here is the view from the cockpit.

GLA may carry more passengers but only becuase the airport has larger aircraft based there by the charter companies. Most of those passengers are bucket and spade. The airport itself is very quiet. Hardly any queues at the holding point which makes it a nice airport to work out of. On time performance is excellent.

EDI on the other hand is a small cramped airport working to it's max capacity. However they don't have lots of charters traffic to bump up the passenger figures. What the do have is a lot of business/commuter flights which makes it a pain to operate out of as you can be sat waiting at the holding point for 20 minutes. What EDI needs is lots of expansion. The demand is there at EDI which I don't see at GLA.

GLA could stay in it's present form for the next 10 years without any modifications. EDI on the other hand desperately needs lots of expansion to keep up with demand. As an impartial bystander on this my money is on EDI getting much bigger at the expense of GLA.

10

D. Graham,

Paisley, Greater Glasgow 16/10/2006 21:20:57

I wonder if there will ever be a message board without the rantings of Edinburgh-centric lunatics? There are fair points in #9-11, but none are entirely right or wrong. For one half the population of Scotland doesn't live in Greater Glasgow - it is nearer 2million, rather than 2.5million. Secondly, it is stated that the demand for business class isnt high from Glasgow Int airport - why in that case has the Glasgow-Dubai route recorded a 50% increase on this type of passenger in an enlarged carrier? While it is true Delta airlines chose EDI rather than GLA, it must be recognised that airlines such as continental and american airlines were based at GLA long before they started operating from EDI. And with Virgin Airlines recently announcing new routes from Glasgow Int to America, it cannot be said that there isnt a West coast market for trans-atlantic flights. Lets not forget a number of airlines who all fly direct to Toronto. And while flyglobespan have axed the proposed routes from Glasgow Int to Barbados and Las Vegas, they werent even considered from Edinburgh, which must be saying something, especially as they are an Edinburgh-based company. When looking at economics, I would think that Glasgow and Edinburgh have a similar input to the Scottish economy, but like it or not as #6 stated, Glasgow is booming and with Edinburgh's economic slowdown already starting, it could be the case in the near future where Glasgow is the economic capital of Scotland. Im not saying that Glasgow Int has a stronger or weaker case to become Scotland's hub rather than Edinburgh, but no matter how much people say that population isnt relevant, im afraid it is! At the end of the day we have 2million people living in the Glasgow metropolitan area, which BAA have obviously considered of importance. Manchester airport is the largest airport in the UK outside of London, and with an urban area population of 2.5million, it is clear why ; it has a similar urban fabric and history to Glasgow,

11

D. Graham,

Paisley, Greater Glasgow 16/10/2006 22:00:40

... and lets clear up this rubbish about passenger numbers declining at GLA, they have increased annually for the last decade. (Source : BAA)

12

WestCoastBiggles,

17/10/2006 16:08:13

RE Comment 13. The reason GLA airport has the Dubai service is more to do with the performance reasons of their aircraft than anything else.

Originally Emirates wanted to launch out of EDI as their preferred airport. Although their A330's could operate off the main runway their Boeing 777 cannot utilise the runway as it is too short. Hence the switch to GLA.

As I say, EDI needs the investment as that is where the demand is.

13

WestCoastBiggles,

17/10/2006 16:09:16

Re Comment 14.

They may have increased over the last decade but certainly not at the same rate as the EDI figures.

14

Graeme F,

Edinburgh 17/10/2006 19:19:47

David (#13), your comment about this website being "Edinburgh-centric" made me laugh. This is the Edinburgh Evening News, and therefore being Edinburgh-centric is precisely what this news forum is all about!! If you really do find Edinburgh debate so distasteful I would politely suggest you go and shadow another city's news website, but I for one make no apology for putting across an Edinburgh point of view in here! Perhaps our city isn't as inconsequential as some like to suggest if Glaswegians spend all day getting worried about what we Edinburghers say in the pages of our own local newspapers!

With regard to your imperialistic rant about "Greater Glasgow", a description which I'm sure many independent-minded and grateful residents of Renfrewshire and Dunbartonshire would strongly object to, you're in danger of giving the impression that Edinburgh is locked into some sort of vacuum on the far side of the moon where all this population is somehow remote and inaccessible to its airport. Millions of people also live within a couple of hours drive of Edinburgh Airport too, you know, and indeed many on the eastern fringes of your "Greater Glasgow" actually find Edinburgh Airport a darn sight more accessible and user-friendly than Glasgow Airport. Plus Edinburgh being Scotland's tourist and business gateway, it more than makes up for any local population factors by its not-insignifcant inbound demand.

As for your interpretation of BAA's master plan, I would kindly recommend you go back and read them both again. BAA predict 26 million passengers a year at Edinburgh by 2030, versus 24 million at Glasgow by the same year. Edinburgh will overtake Glasgow as Scotland's busiest airport long before then, as BAA themselves have acknowledged. You may not like that fact, but it is a fact nevertheless.

Glasgow IS in decline, IS bleeding passengers and airlines, and IS less profitable than its east coast counterpart. No amount of s

15

D. Graham,

Cambuslang, South Lanarkshire 18/10/2006 20:21:19

RE #17, I couldnt agree more with your comments regarding the east coast media, papers are written to sell and i doubt that the Edinburgh Evening news would do as well if it was written in the same style as the Glasgow Evening Times, however the Scotsman, being a broadsheet newspaper, should really take a less biased and more diplomatic approach to stories, similar to that of The Herald, which, while its an essentially Glasgow-based newspaper, very rarely displays an East coast bias and tends to report fairly for Scotland as a whole, hence the reason why the Scotsman finds itself unpopular within the particular market that it aims for here in the West.
As an "independant-minded and grateful" resident of the South Lanarkshire local authority, I must point out to you that the idea of extending the boundaries of Glasgow to take in the whole city, is a popular one, because with a population of 2million people, council tax for the vast majority of this group would fall, whether dramatically or more modestly, as a much greater revenue from the higher-earning population, who tend to live in the Greater Glasgow suburbs, would allow the council to provide even better facilites for a larger population over a slightly larger area. Since being cut out of the City of Glasgow in 1996, my council tax, and many others, has risen to a level where we are paying more than we would have had we remained part of Glasgow City.
To concentrate on the article in question, while I recognise that EDI has been growing at a faster rate than GLA in recent years, GLA will always be more attractive to the majority of airlines because, as already mentioned, they will always base themselves where the centre of population lives, and that, like it or not, is Greater Glasgow and its inner city. While EDI is closer to me than GLA, I find the route to GLA an easier one to follow, and the facility is far superior to its Edinburgh counterpart, not to mention a higher number of inter

16

D. Graham,

Kelvindale, Glasgow 18/10/2006 21:57:57

The last few comments have brought out some interesting points, #17 claims that EDI is more accessible to more of the population than GLA. If this is in fact the case, it wont be for much longer - people that live in areas such as Cambuslang and even further east of Glasgow will find GLA much more accessible than EDI when the M74 extension is completed in a few years time. Even with EARL up and running, when the Glasgow Crossrail scheme is supported (either by the Executive or a private investor) it will have the best rail link in Scotland at a fraction of the price, with more trains per hour than any other rail link already in place or proposed. So while EDI may overtake GLA in the near future, it seems very doubtful that it will retain this position for long, because as it stands, the transport proposals to improve accessibility at GLA are those for an hub airport in the making. Im not debating whether or not BAA are biased, but from their masterplan and the mentioned schemes, I think the EDI planespotters will have to accept that their bubble is going to burst, sooner rather than later

17

Barry,19,

Glasgow 19/10/2006 00:56:37

The unitary authorities are going to be redrawn next year anyway so the chance of a Greater Glasgow council seems quite likely, and #13Greg Glasgow's population has increased the last 3 years running the city now stands at 585,090 and is rising.


 

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