The story
British Airports Authority
The British Airports Authority was established by the Airport Authority Act 1965, to take responsibility for four state-owned airports from the Ministry of Aviation – Heathrow Airport, Gatwick Airport, Prestwick Airport and Stansted Airport. In the following few years, the authority acquired Edinburgh Airport (1971), Glasgow Airport (1975) and Aberdeen Airport (1975). The authority took on the Ministry of Civil Aviation Constabulary in 1966, which was renamed to become the British Airports Authority Constabulary, and was disbanded between 1974 and 1975.
As part of Margaret Thatcher's moves to privatise government owned assets, the Airports Act 1986 was passed which mandated the creation of BAA plc as a vehicle by which stock market funds could be raised. The initial capitalisation of BAA plc was £1,225 million. In the early 1990s, the company sold Prestwick International Airport (now known as Glasgow Prestwick Airport).
International operations and takeover
BAA won a contract to manage the retail operations at Pittsburgh International Airport in 1991 through its BAA USA subsidiary.
In 1995, BAA was became a cross listed company when listed on the Australian Securities Exchange in anticipation of the privatisation of the Federal Airports Corporation's airports. It was delisted in July 1998.
In December 2005, BAA made a winning bid of £1.2 billion for a 75% stake in Budapest Ferihegy International Airport, the largest airport in Hungary, which was being privatised by the Hungarian government.
In July 2006, BAA was taken over by a consortium led by Ferrovial, following a bid which valued the company at £10.1 billion ($20 billion). As a result, the company was delisted from the London Stock Exchange (where it had previously been part of the FTSE 100 Index) on 15 August 2006. Following the take-over, the decision was made to sell the stake in Ferihegy and this was completed in June 2007, when a consortium led by Hochtief AirPort of Germany purchased the stake.
BAA expanded into international operations, including retail contracts at Logan International Airport and Baltimore-Washington International Airport (through BAA USA), and a management contract with the City of Indianapolis to run the Indianapolis International Airport (as BAA Indianapolis, Inc.) before ultimately selling off its US division to Prospect Capital Corporation in July 2010.
Divestitures under Ferrovial
After an inquiry which ran from August 2008 to March 2009, the UK Competition Commission announced that BAA would be required to sell three of the seven UK airports it owned at the time within two years, over fears the monopoly position held by BAA over London and Scotland's airports could have "adverse effects for both passengers and airlines". These were Gatwick, Stansted and either Glasgow or Edinburgh airports. The sales were forecast to raise between £3.5bn and £4bn.
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BAA announced plans to sell Gatwick Airport on 17 September 2009. At that time, the airport was valued at £1.8bn by regulators and it appeared that several firms including Macquarie Group, Manchester Airports Group, Fraport and Virgin Atlantic were interested in this sale, either on their own or as part of a consortium of companies. Ferrovial and its partners (Government of Singapore Investment Corporation and the Caisse de dépôt et placement du Québec) had been seeking £1.8bn to £2bn when they opened the bidding process.
Eventually, the sale was confirmed on 21 October 2009 and formally completed on 3 December 2009, for a fee of £1.51 billion, almost 25 per cent less than BAA had expected Gatwick would fetch when the sale was announced a year previously. BAA sold the airport to Global Infrastructure Partners, the fund backed by Credit Suisse and General Electric, who also operate London City Airport. Ferrovial, the majority holder in BAA, said that it expected to make a capital loss of around 142 million euros (US$212.6 million) against its consolidated earnings following the sale.
In October 2011, BAA announced that Edinburgh Airport would be put up for sale in early 2012 with an aim to handing over the running of the site to a new owner by summer 2012. Numerous groups were reported to have expressed interest, including a consortium of Scottish businesses headed by former Edinburgh Airport Manager, and Fraport, the owners of Frankfurt Airport, Germany. The airport was sold to Global Infrastructure Partners in 2012. Later that year, the company name was changed to Heathrow Airport Holdings Limited.
In January 2013, it was announced that Stansted would be sold to the Manchester Airports Group, a holding company owned by the 10 borough councils of Greater Manchester.
In May 2014, Heathrow Airport Holdings announced the appointment of John Holland-Kaye, current Development Director, as chief executive officer, succeeding Colin Matthews on 1 July 2014. The company agreed on 16 October 2014 to sell Glasgow, Southampton and Aberdeen airports to AGS Airports, a consortium of Ferrovial and Macquarie Group for £1 billion, in order to focus solely on Heathrow.
COVID-19 pandemic and new consortium
As of 2020, during the COVID-19 pandemic which enormously reduced air travel, the company had debts of over £17 billion to banks and bondholders. It is amongst the highest indebted UK companies, though 90% of its shares are held overseas. Its request in October 2020 to increase airport charges was rejected by the Civil Aviation Authority.
In January 2024, Ferrovial announced it would sell its shareholding to Ardian and the Public Investment Fund, subject to approval by regulatory bodies and rights which may be exercised by other shareholders. On 15 December 2024, it was reported that Ardian and the Public Investment Fund of Saudi Arabia have successfully acquired 22.6% and 15% respectively of stakes in Heathrow Airport for a combined US$4.12 billion through Ferrovial and other shareholders in FGP TopCo.
From Wikipedia’s article on Heathrow Airport Holdings, shared under CC BY-SA 4.0.5