A Canadian consortium purchased London City Airport (LCY) for an estimated £2bn (US$2.78 bn).
London City Airport
Announcing the deal, Declan Collier, CEO, London City Airport said:
“I’m delighted to welcome the Consortium as the new owners of the only airport actually in London.
“London City Airport is a successful business with huge opportunities for growth – opportunities that will create jobs, generate more benefit for the UK economy and build new connections to and from London to commercial centres around the world.
“GIP’s ownership has turned the airport into the award-winning and record-breaking business that it is today, and I look forward to working with the new shareholders, as responsible, long-term investors, to build on that success for the future.”
The consortium includes Alberta Investment Management Corporation, and investment funds the Ontario Teachers’ Pension Plan and Wren House, part of the Kuwait Investment Authority.
London City Airport carried a record 4.3 million passengers in 2015. It is one of five airports serving the greater London area . The others are:
|AIRPORT NAME||AIRPORT CODE||TYPE||PASSENGER MIX||DOMINANT CARRIER|
|London Heathrow Airport||LHR||Domestic / International||High Yield||British Airways|
|London Gatwick Airport||LGW||Domestic / International||Mix High Yield / Leisure||British Airways|
|London Stansted Airport||STN||Domestic / Regional European||Leisure||Ryanair|
|London Luton Airport||LTN||Domestic / Regional European||Leisure||easyJet|
Its location east of downtown London (11 km; 6.9 mi) is ideal for business travellers who want to spend a day working in the city and catch a flight home in the evening.
Airport Design and Route Network
Celebrating its 30 year anniversary in 2017, the airport’s runway (09/27) has a length of 1,508 m (4,948 feet). Given the short runway length, most carriers use regional jets for this airport for short haul European flights with the top 5 destinations in 2014 being (figures from airport authority):
|Rank||Airport||Passengers handled||% Change 2013 / 14|
British Airways also uses this airport for its Transatlantic flight to New York JFK International Airport (JFK) twice daily. Both flights are flown on Airbus A318s featuring 32 Club World (business class) seats. On outbound duties, the aircraft will make a pitstop at Shannon Airport (SNN) for re-fueling. Passengers can also access this airport’s US pre-clearance facilities on BA1 (Insight – US Pre-Clearance).
Operations and Transportation
Operations are restricted to 06:30 to 22:30 (630am to 1030pm) Monday to Friday, 06:30 to 13:00 (630am to 1pm) on Saturdays and 12:30 to 22:30 (1230pm to 1030pm) on Sundays. These restrictions are used to manage noise pollution in East London.
The airport features a two-story terminal design and is connected to Docklands Light Railway (DLR) for easy access to financial districts and other modes of public transportation. Passengers can also walk and bike to the airport directly.
Capital Investment / Ownership
Global Infrastructure Partners bought London City Airport back in 2006 for around £750 million (US$1.05 bn (2016 dollars). The new sale price provided the prior owners with a 266% return on investments.
In 2012/13, the Airport Master Plan was refreshed to include elements of the City Airport Development Programme (CADP). The goal was to increase flight movements more than 65% from around 76,260 (2014) to 100,000 by 2020 and 120,000 by 2030. Total passenger count would increase to six million annually.
Longer taxiways, hotel located on airport premises, new offices and additional parking were included in long term expansion plan. This was rejected by London’s mayor Boris Johnson back in March 2015 (News – March 2015).
The new owners will likely revisit this plan, address its shortcomings (specifically on noise pollution concerns) and resubmit it for city council consideration.
While no changes have been announced, the consortium would likely analyze different options to generate additional revenue from concession stands and user fees. Additional facilities or landing fees would bring higher airlines’ costs. This could translate to higher ticket prices for passengers.