It’s been rumoured for quite some time, but as an early seasonal present to the investment community Edinburgh Airport has been placed on sale by its current owners - Global Infrastructure Partners (GIP) - who have instructed advisers on a sale process. As a private equity concern, GIP were always likely to move the asset on at some point, and with the market recovering strongly they probably feel now is as good a time as any. So, an early January sale will interest many investors around the world from sovereign funds to equity investors, specialist infrastructure funds and even existing airport operators. So, in estate agent’s terminology, what are they selling?

Newly Renovated Property

Every airport is a permanent building site, but in recent years Edinburgh has been working hard on reshaping the terminal and upgrading facilities, which (in airport language) means creating more space for retail. Compared to twenty years ago, the airport is certainly a more pleasant experience with direct access to the City via the tramlink and inter-modal connectivity to the rest of Scotland, which ticks many sustainability boxes. Any new owner will of course have investment to make but the basics, and more, are already in place. 

Close Proximity To Local Services

Having access to a strong local market demand and especially a large corporate community increases the attraction of any airport, and Edinburgh ticks that box with its finance and insurance base that can support services like those to London City on their own. Overlay that with global events such as the Edinburgh Festival, then Edinburgh is quite unique in having both strong out and inbound markets; directionality and seasonality are balanced, which certainly appeals to those counting the cash!

Loyal Customer Community 

An airport needs a steady and happy base of airline customers and Edinburgh seems to be a popular facility judging by the range of customers operating at the airport. Thirty-eight scheduled airlines have operated from Edinburgh this year, compared to twenty-five in 2010.   Notable “wins” since 2019 include Ryanair (again), however, some other carriers including Emirates have yet to return and American Airlines will only restart services next year. 
In the forthcoming glossy sales brochure, it’s likely that much will be made of the easyJet network and presence which is larger than Ryanair and makes them the largest airline operating at the airport.

Steady Growth Since 2010 

Since 2010, Edinburgh has increased capacity by over 44% and some 8.6 million scheduled seats. This year Edinburgh is within a percentage point of recovering to 2019 capacity levels and should be ahead of 2019 levels by this time next year: always a positive message when selling something. In recent years, the airport has certainly been on an upwards trajectory much of which has been based around the return of Ryanair, and growth from other low-cost airlines, which means 70% of scheduled capacity now comes from this sector compared to 58% in 2019. The growth in the low-cost sector will undoubtedly be spun as providing a more creative base of airline customers that know how to stimulate market demand, rather than a yield risk to aeronautical revenues. 

Available operational capacity has always been a bit of a challenge at Edinburgh, and for any potential investor identifying how much more capacity can be squeezed out of the airport will be crucial. The airport topped 31,000 departing seats on five days this year - the bank structure below (for one of those days) highlights how the airport is busy from 06:00 through to 21:00, so careful analysis of available gates and apron space may be an important part of any diligence process.

Is Edinburgh Worth It? 

Every house has its price, and every airport has an even higher price. Experience of airport transactions suggests that there is always someone who believes there is an upside to the airport, that more non-aeronautical revenues can be generated or that further operational efficiencies can be achieved. And in some cases, they can, and in others it proves more challenging than first thought or paid. One thing is for sure though, Edinburgh and its current owners won’t be selling by January, and it certainly will not be at a discounted price for anyone.

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