LCY deal to close soon
Final bids to buy the UK’s London City Airport (LCY) were lodged on September 12 and a deal was expected to be agreed upon around press time. According to LCY managing director Richard Gooding, the sale will release new funds for further investment at the privately owned, downtown gateway.
Irish financier Dermot Desmond bought LCY from UK construction group Mowlem in 1995 for £23.5 million ($43.9 million at current exchange rates). London commercial property advisors have valued the business today at between $560 million and $935 million.
Morgan Stanley is managing the bidding process. The only prospective owner to have publicly confirmed itself as a shortlisted bidder is a consortium led by Spanish construction group Sacyr Vallehermoso.
LCY is now embarking on a third phase of development for the London City Jet Centre FBO that it opened in 2002. Earlier this year, the airport launched its own executive charter broker, Private Jet, which also offers aircraft management services.
This year, it expects to handle around 13,000 business aircraft movements. Nearly half of these are aircraft operated by fractional ownership group NetJets Europe, which, according to Gooding, has some 500 of its share owners working in the nearby Canary Wharf business district.
Business aviation traffic would likely be growing even faster at LCY, were it not for the fact that U.S. N-registered aircraft cannot currently operate there because the FAA will not issue operators the required letter of authorization, even if a specific aircraft type has been cleared for the airport’s 5.5-degree steep approach.
More than 20 business aircraft types have been approved to operate at LCY. Certification trials will continue with the Airbus A318 Elite this month. The latest in the Airbus Corporate Jetliner line has already flown into LCY’s 5,184-foot runway and it is now trying to establish that it can do so more quietly.
Push for More Northolt Movements
Addressing the regional forum of the European Business Aviation Association at the UK’s Farnborough Airport on September 13, Gooding said that LCY is working with the Ministry of Defence (MoD) to seek approval to increase the number of movements permitted at Northolt Royal Air Force Base. In July, LCY took over private aircraft handling at the west London facility and it wants to build the case for increasing the current annual limit of 7,000 civil aircraft movements.
“The key is having the right expertise for dealing with the local community,” Gooding told AIN, adding that funds from LCY’s new owners might be available to improve facilities at Northolt. The London City Airport management has patiently and consistently worked with its local community on the east side of the UK capital to win political backing for various developments.
However, according to Farnborough’s local Member of Parliament, Gerald Howarth, the case for increasing civil traffic at Northolt does not just come down to making friends with the local community. In his view, the MoD has good reason to set aside operational capacity at Northolt for military purposes. Howarth, who sits on the House of Commons defense committee, suggested that Northolt might be under consideration as a new base for RAF fighters tasked with intercepting airliners hijacked by terrorists. This squadron is currently based at RAF Coningsby in the north of England.