Glasgow Airport 'more likely' to be sold as trade lags Edinburgh

Published on Saturday 20 February 2010 14:04

PRESSURE on BAA to sell Glasgow Airport is set to intensify after new figures revealed it is lagging behind Edinburgh in winning new airlines and passengers.

While Scotland's capital has managed to fill the gap left by the collapse of Scottish airline Flyglobespan, Glasgow is said to be struggling to replace the lost business.

A spokesman for Edinburgh said new routes and extra flights added by air carriers this month, including Ryanair and Jet2, had replaced the 400,000 passengers a year going through the airport on Flyglobespan.

Glasgow Airport, however, had a larger number of Flyglobespan customers, more than 550,000, leaving it struggling to fill the deficit. A source said Glasgow would find it "difficult to get other carriers to commit to backfilling" this year. Both airports have made progress in expanding routes.

In Glasgow, Thomas Cook, Thomson Holidays and First Choice have announced extra capacity on Mediterranean routes while Virgin Atlantic confirmed an extra seven summer flights to Florida.

But Glasgow lost out when Ryanair added three new routes and extra flights on 16 others from Edinburgh and Prestwick.

Ian Doubtfire, managing director of Jet2.com, which announced a 14th route from Edinburgh to Palma, Majorca, last week, said there was "no reason why we couldn't" expand in Glasgow but that the airline preferred maintaining its focus on Edinburgh.

"We see Edinburgh as a market we can develop," said Doubtfire. "It has been a fast growing airport over the past few years, it is a very attractive inbound destination so we will continue to service Edinburgh for the time being."

BAA, which owns both airports, will reveal its annual results tomorrow, releasing new figures on its level of debt. Last September BAA had a debt burden of 13 billion. This will have been reduced following the 1.5bn sale of Gatwickand a complex refinancing which reduced its Spanish owner Ferrovial's stake in the business from 61 per cent to 56 per cent. In January, analysts warned Ferrovial was at risk of a possible default on its debt.

In December, the Competition Appeal Tribunal upheld BAA's appeal against the Competition Commission's ruling that it would have to sell Stansted as well as either Edinburgh or Glasgow. The commission itself has launched a counter appeal.

John Strickland, an aviation analyst, said BAA had merely won a delay in the process and that the company's debt load would require the sale of airports whether the Competition Commission won its case or not.

"It guarantees as least a delay, but given their debt position we will still see those airports sold," said Strickland.

Stuart Barwood, an aviation analyst with Brolin Consulting, said Edinburgh's improving business made Glasgow the sale target.

"My gut feel is they (BAA] will want to keep Edinburgh," said Barwood. "The one thing Edinburgh has is a good inbound destination. You get the high yielding passengers going through Edinburgh rather than Glasgow. Glasgow is much more Scottish people flying outbound. Edinburgh has a combination of two-way traffic which you need."