American International Group and an investment fund run by General Electric and Credit Suisse Group announced an agreement last Wednesday to buy London City Airport for an undisclosed amount from the Irish billionaire Dermot Desmond, taking over a terminal serving almost two million regional business travellers a year.
AIG, which is a leading insurer, and the fund run by GE and Credit Suisse will each own 50 percent of London City Airport, the companies said.
The 139-acre, or 56-hectare, airport handles small turbo-prop and jet aircraft like the ATR 42 and British Aerospace 146 for short-haul flights to British and other European destinations.
Its terminal serves almost two million regional business travellers a year. London's City Airport is much more convenient than the other London airports as it's much easier to get to from the office, especially when you fly back and forth from Europe a lot.
The relocation of law firms and the headquarters of banks to Canary Wharf, where about 78,000 people now work, has driven the airport's growth since its opening in 1987.
The airport handled two million passengers in 2005. About 70 percent of those travel for business and make their return trip on the same day or a day later.
City Airport forecasts that the expansion of Canary Wharf, a London financial district, and the 2012 Olympic Games will help quadruple passenger numbers to eight million in the next 25 years.
Airports are attracting interest from investors in search of reliable flows of cash.
AIG, General Electric and Credit Suisse won a three-month contest for the airport, defeating bids from a group comprising Cologne-Bonn Airport and the infrastructure fund Galaxy, and a team including Balfour Beatty and Merrill Lynch.
Fraport, operator of Frankfurt airport, pulled out of the race last month saying the price could not be justified.