The market for UK airport infrastructure saw significant activity as three more regional airports were put up for sale by their Canadian pension fund owner, the Ontario Teachers' Pension Plan (OTPP). The airports in question are London City, Birmingham, and Bristol, part of a portfolio that also includes Copenhagen and Brussels airports, which are collectively estimated to be worth over £10 billion. The move to sell these assets comes amid a resurgence in air travel post-COVID, with the aviation sector experiencing a robust recovery in passenger numbers.
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OTPP, holding stakes in each airport ranging from 25% to 70%, is looking to capitalize on this boom by initiating talks with minority shareholders who have a 30-day right of first refusal. However, the possibility of these smaller stakeholders selling their shares instead of buying more suggests that OTPP might also be seeking offers from external investors, including the Australian infrastructure giant Macquarie.
This strategic divestment follows a trend of airport sales in the UK this year. Earlier, Spanish investor Ferrovial sold a significant portion of its stake in Heathrow Airport to a Saudi-French consortium for £3.3 billion. Additionally, French infrastructure group Vinci acquired a 50.01% stake in Edinburgh Airport for £1.3 billion, and AGS Airports, overseeing Aberdeen, Glasgow, and Southampton airports, was sold to AviAlliance for over £1.5 billion.
The airports involved in this latest sale have their unique attributes. London City Airport, known for its business traveler clientele, had its passenger cap increased earlier this year, enhancing its appeal to potential buyers. Birmingham Airport is undergoing a multi-million-pound renovation to increase capacity, aiming to serve more long-haul routes. Bristol Airport is expanding its operations to meet growing regional demand. The sale of these airports reflects broader economic strategies by pension funds to diversify their investments and secure returns from the aviation sector's recovery. For the airports, new ownership could mean fresh capital for development, modernization, and potentially better service offerings for passengers. However, the process also underscores the dynamic nature of infrastructure investment, where ownership can shift as investors seek to balance their portfolios in response to market conditions and growth prospects.