Three major airports located across the UK—London City, Birmingham, and Bristol—are reportedly on the market, as their Canadian owner seeks to take advantage of the revival of air travel after the pandemic. The Ontario Teachers’ Pension Plan (OTPP) is currently engaged in discussions with minority shareholders about selling its stakes, which could fetch upwards of £10 billion, according to multiple reports. Alongside these UK airports, the portfolio also includes Brussels and Copenhagen airports, making it a significant transaction within the aviation sector.
The stakes owned by OTPP vary, ranging from 25% to as much as 70% across the airports involved. If all goes according to plan, the pension fund could potentially see more than £3.5 billion from this deal alone. This move highlights the surge in demand for air travel, which stakeholders are eager to capitalize on; records indicate airports like Heathrow welcoming unprecedented passenger numbers this summer.
The sale discussions come on the heels of the air travel sector bouncing back faster than many had predicted following COVID-19 restrictions. Recent statistics reveal not only record flights at Heathrow but similar surges at other British airports, rekindling interest among investors both domestically and abroad.
OTPP isn’t working alone here. The pension fund has also begun to explore options with external bidders, with Australian investment firm Macquarie being flagged as one prospective interest, especially should minority shareholders decide against acquiring the stakes themselves. Their 30-day right of first refusal, if opted out of, could lead to large-scale involvement from various investing parties.
Meanwhile, the ownership dynamics of UK airports have seen substantial shifts this year, with various transactions marking significant changes. AviAlliance secured AGS Airports—owners of Aberdeen, Glasgow, and Southampton Airports—through a sale estimated at over £1.5 billion. Adding to this, the new Saudi-French consortium's approved bid this summer for a majority stake in the heavily trafficked Heathrow marks yet another shakeup within the sector.
With significant expansions also brewing at airports like City Airport, which aims to increase passenger capacity to 9 million annually with government approval for expansion, the UK’s air traffic sphere finds itself at the cusp of plenty of potential growth opportunities.
This pattern of economic activity surrounding UK airports signifies wider trends, including heightened interest from Canadian pension funds such as PSP Investments, which recently acquired the operator of Aberdeen, Southampton, and Glasgow airports.
Overall, as airports rebound from the drastic reductions experienced during the pandemic, significant financial maneuvers by stakeholders are likely to continue reshaping the UK's aviation complexion. The potential sale of these major airports denotes not just the resurgence of air travel, but also international investor confidence, aiming to rekindle the aviation market's pulse for years to come.
