Gatwick bidders are too skint to buy airport
After a week in which we learnt that all the Gatwick bidders wanted a second runway we learn that none of them can even afford to buy the airport. Gatwick has turned into a 2-bed flat in Streatham, with buyers lying to get a mortgage and the owner hinting at conservatories and loft extensions.
Which presumably makes the credit rating agency, Standards and Poor's, a bit like the credit crunch in this over-stretched metaphor, shaking the property ladder and laughing as your chain collapses under the weight of its own bluster. They've refused to give any of the bidders an appropriate credit rating if they borrow more than £800 million - half of the airport's already reduced cost. Just last summer Gatwick was meant to cost £2 billion, but it's now down to £1.6 billion; today's news means it's likely to sell for even less.
BAA is clearly unhappy and trying to talk up the value; hence last week's scare stories about more runway potential. Returning to our metaphor, BAA wants buyers to think that Gatwick is a real fixer-upper, despite being poorly served by transport links and probably suffering from subsidence. An airport which can expand is worth more than one which can't, but it's worth nothing if your buyers can't afford it. S&P doesn't think much of these bids: one was described as "an aggressive financial risk profile characterised by relatively high debt leverage as demonstrated by an opening debt/RAB ratio of 54pc". I have no idea what that means, but it doesn't sound very good.
Perhaps now is a good time to remind BAA that Plane Stupid is happy to buy the airport, and that we'll close it and turn it into a newt sanctuary. Stopping all those flights is worth a fortune in carbon credits, and we'll give all the airport's staff jobs looking after our amphibian friends. BAA, if you're listening, just give us a call. Newts are cute and deserve a new home.