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Saturday 19 January 2013

Stansted Renationalised Shock

The news that Heathrow Airport Holdings, formerly BAA, had given up its fight against the order to sell Stansted Airport was not at first considered significant: that they would have to go along with the Competition Commission ruling was expected. But when the buyer was revealed as Manchester Airports Group (MAG), realisation took hold that Stansted had been effectively renationalised.

How so? Well, MAG is ultimately owned by the ten local authorities of Greater Manchester. The councils of Wigan, Bolton, Bury, Rochdale, Tameside, Stockport, Salford, Trafford and Oldham each own 5%, with Manchester City Council owning the majority 55% share. Along the way, MAG has also acquired East Midlands Airport and Bournemouth Airport.

So what of the political complexion of the owners? The news for ardent free marketeers is not good: apart from Trafford, where the Tories retain overall control, and Stockport, where the Lib Dems are the largest single party, the remaining eight are at present solidly Labour. And this is Bozza’s preferred airport for superhub development when (not if) his island scheme is finally laid to rest.

It’s not all doom and gloom for capitalism, however: Industry Funds Management (IFM) of Australia will take a 35.5% stake in MAG as part of the deal. But this still leaves those rotten lefties in charge, to which I say, so what? Airports owned by local Government are no big deal – Luton is still owned by the council, and Newcastle is majority owned by the local authorities of Tyneside and Wearside.

And in any case, every airport in the UK was built and developed under the aegis of Government, with the exception of London City, and that received significant subsidy from the London Development Agency. Airports were either built by local authorities or by central Government via the Royal Air Force (RAF). Some local authority sites were commandeered by Government during World War 2.

So local Government has considerable knowledge of running airports, and moreover the team at Manchester Airport has the recent experience of getting a second runway built – in the teeth of local opposition. Stansted was slated to have a second runway, and will need one if there is significant future expansion, but BAA dropped plans for one despite spending around £200 million on it.

That second runway plan will be back, and there will be expansion. After all, the new owners already run the UK’s third busiest airport, so they know their stuff. Forget the idea that the public sector can’t do this kind of thing.

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