LONDON—The U.S. private-equity fund that owns London City
Airport is putting it up for sale.
Global Infrastructure Partners, which has owned the airport
since 2006, hopes to complete the sale by year's end, said Michael
McGhee, the head of transport at GIP. Bankers have yet to be
appointed, he said in an interview Wednesday, with the sales
process due to gain steam in September.
London City is popular with London's financial community because
of its proximity to the heart of the capital and because of the
ease with which passengers can get from check-in to their planes.
The airport has focused on whisking passengers through the terminal
without long waits.
"At the moment, the demand for quality infrastructure assets is
high, so we believe it is a good time to sell this particular
asset," Mr. McGhee said, noting the airport is the asset GIP has
held the longest.
Services from London City operate mainly to European cities,
though British Airways operates a twice-daily flight to New York
using an all-business-class, 32-seat Airbus Group SE A318 jet.
London City's plans to expand service have met political opposition
that have stalled the effort.
With few airports coming up for sale, Mr. McGhee said London
City should attract strong bids. The airport is being sold in its
entirety, with minority stakeholder Oaktree Capital also exiting,
he said.
GIP doesn't publish financial reports for London City, which
generated between GBP50 million ($78 million) and GBP100 million in
earnings before interest, taxes, depreciation and amortization. GIP
paid around 27 times earnings when it bought the facility, so a
sale could yield around GBP2 billion.
Expansion of London City has won local endorsement but met with
political opposition. An appeal to the political roadblock is
expected to be decided next year, Mr. McGhee said, adding it should
not be an impediment to a sale.
GIP also owns London Gatwick airport, Europe's largest
single-runway hub, located south of the city. Gatwick has sought
government backing for a second runway, though an independent panel
recommended rival Heathrow airport should be allowed to expand
instead. The government said it would decide this year how to
address a looming runway capacity shortfall in the London area.
Mr. McGhee said GIP would retain ownership of Gatwick and the
Edinburgh Airport, which it also owns.
Write to Robert Wall at robert.wall@wsj.com
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