Comment: All change at airports | market swings

ALL change at Scotland’s airports. The Glasgow and Aberdeen outfits (along with Southampton) have been sold by Heathrow Airport Holdings (HAH) to a 50:50 joint venture composed of Spain’s Ferrovial and the Australian investment bank Macquarie.

Gerorge Kerevan. Picture: Ian Rutherford

Debt-burdened Ferrovial, of course, still owns a quarter stake in Heathrow. This complicated rearrangement allows the company to obey a diktat from the Competition Commission to break up its monopoly control of key London and regional airports, yet retain a finger in some profitable pies.

What Macquarie is up to is less clear. The Aussie financial giant took a battering during the credit crisis, when the market turned against its complex and opaque satellite funding vehicles. Under new CEO Nicholas Moore, it has been busy de-risking, setting its sights on becoming an ordinary investment bank. But attempts to expand in the US were thwarted by the revival of JPMorgan and Goldman Sachs. Macquarie has acquired a series of disparate assets in the US. This has prompted criticism that Moore lacks a cohesive strategy. The UK airport deal harks back to the old Macquarie and smacks of opportunism.

Scotland’s airports have not done well out of Antipodean involvement. Infratil, a New Zealand hedge fund, bought Prestwick and other European regional airports, in the early 2000s. But the global crisis ruined Infratil’s bet that passenger traffic would grow. The company got rid of its European airport holdings last year.

Prestwick desperately needs direction. Scots businessman Stuart McIntyre thinks he has the answer. Previously, he worked for British Aerospace. He then turned his hand to medical hi-tech start-ups in England. And he is the grandson of David Fowler McIntyre, founder of Scottish Aviation Ltd and Prestwick Airport itself.

Stuart McIntyre has just established Prestwick Spaceport Consortium, to drive Prestwick’s bid to become the UK’s preferred site for a spaceport. In July, the UK government shortlisted eight potential sites to host commercial space flights and satellite launches. Six of the eight are in Scotland.

He believes Prestwick, with its long runway, is the frontrunner. However, the Scottish Government seems hesitant to champion it, perhaps for fear of alienating the other Scottish bids. That could advantage the single English contender, Newquay in Cornwall.

Low rates fuel rather than dampen volatility

BACK on Earth, stock markets had violent mood swings all week, prompted by fears about the global economy. Andy Haldane, the Bank of England’s chief economist, was quick to announce interest rates were likely to remain unchanged for much longer. However, rock bottom rates are part of the problem. Post the credit crunch, bank trading rooms hold far fewer bonds, reducing potential market liquidity. The second rates rise, and bond prices fall, there will be a huge sell-off. But if the bond markets lack liquidity, prices will have to be marked down to get a sale. Hence the current volatility.