lbaspotter

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Well I dont really know if this is good news or bad news for the North East Aviation enthuisists but it looks like the For Sale sign will be going up at Newcastle Int'l Airport very shortly if its current owners have anything to say about it. This artical has appeared in todays daily email update from the Travel Trade Gazzet.

Source: http://ttg.ubm-info.com/c/1GE0FQOl7P9kprut2uP

Newcastle airport 'to be put up for sale'
Monday, April 18, 2011

Chris Gray

Newcastle airport is being put up for sale as the local authorities that own it try to reduce debts, according to a report.

Seven councils, which own 51% of the airport, have appointed KPMG to advise them ahead of a 2013 deadline to repay a £320m loan, according to the Sunday Times.

Newcastle airport could not be reached for comment this morning. But the paper claimed that accounts for the firm that controls the councils’ stake was £4.2m in the red in 2009 after paying our almost £22m in interest.

The councils are said to need a new equity investor to put cash into the business or they will have to sell their own stake.

The authorities are Durham, Gateshead, City of Newcastle, North Tyneside, Northumberland, South Tyneside and City of Sunderland.

Anyone like to buy??
 
It looks as though it's more to do with councils reducing debt in these straitened times where they are all desperate to to trim budgets on government diktat, rather than a de facto concern about the airport's financial future.

Some of Maquaries' cash-hungry funds sold their share in Bristol Airport when the cash-flow from the airport slowed down as the recession bit. A Macquarie infrastructure fund together with a major Canadian pension fund now own the airport in a way that sees increasing the value of this capital asset an important consideration; that's not to say that cash generated by their investment is not welcome or even important because it certainly is.

Newcastle might be a tempting target for investors intent on increasing capital values.
 
There was an article posted here some time ago saying one of the councils was concerned the airport was loosing value so they might be keen to offload the airport if they fear the value is going to drop further.
 
I had in mind investors intent on improving the value of their investment by creating value in the form of enhancements, expansion - the idea of speculating to accumulate.

There are signs though that the future of the industry may not be as certain as it looked, say, five years ago with rail increasingly competitive with air on many domestic (particularly) routes, the increasing cost of oil and economies generally looking to cut back.

However, it's usually the case that the best-prepared organisations (in any field) take most advantage of upturns when they come.

The snag with local authority-owned airports is that though their ownership is vested in separate companies they still find raising cash a strain, especially in times of severe restraint.

It will be interesting, and instructive, to see who shows interest in buying NCL.
 

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