Heathrow’s Spanish owner is exploring selling its 25% stake in the business amid interest from a French investor, following a bitter dispute with the regulator over airport charges.
Heathrow’s biggest shareholder Ferrovial is understood to be in talks with advisers about a possible sale of its stake in the UK’s biggest airport after it fiercely opposed a decision by the Authority to ‘Civil Aviation (CAA) to reduce the limit of landing fees charged to passengers.
The Spanish shareholder is said to have been approached by Ardian, the Paris-based private equity firm, about a possible joint deal with Saudi Arabia’s Public Investment Fund.
Ardian held a 49% stake in Luton Airport between 2013 and 2018, during which time it invested £150m in a major expansion that saw its passenger numbers grow from 12m to 18m.
The investment house sold its stake in Luton in 2018 to Australian investor AMP Capital in a deal believed to be worth £1bn.
The investment house, which is headed by French businesswoman Dominique Senequier, also has a 49% stake in Italian airport network 2i Aeroporti and has stakes in Milan’s Malpensa and Linate airports.
Ardian first approached Ferrovial to buy its stake in Heathrow last year, Reuters reported, but discussions did not progress. It is understood that any current discussions regarding Ferrovial’s interest cannot result in a sale.
Ferrovial has previously warned it would be skeptical about committing further funding to Heathrow if the airport fails to secure an adequate increase in airport charges from regulators.
Ignacio Madridejos, Ferrovial’s chief executive, said in 2020 that it could “rotate the asset” if “regulation is at a level where we cannot get an adequate return for our investors”.
Heathrow, meanwhile, has said it needs to raise fees to ensure the airport does not fall into disrepair.
The CAA said in June that the cap on landing charges charged per passenger at Heathrow would drop from £30.19 to £26.31 in 2026, despite a furious lobbying effort by the airport to increase charges further of £40.
John Holland-Kaye, Heathrow’s chief executive, criticized the decision, adding that it underestimated “the fair investment required” to maintain operations at the airport.
He said: “Uncorrected, these elements of the CAA proposal will only lead to a worse experience for passengers at Heathrow as investment in the service dries up.
“The CAA’s proposal will undermine the delivery of key improvements for passengers, while raising serious questions about the UK’s attractiveness to private investors.”
An airport industry source said the lower charges “will not enable investment” at Heathrow and will not “incentivize” shareholders to provide more funding to the UK’s main travel hub.
They confirmed that the charge dispute would be a key factor in any discussions about selling the Ferrovial stake. The CAA is currently consulting on airport charges and is expected to make a decision in the autumn.
Ignacio Castejon, Ferrovial’s head of the airport, warned last year that the Spanish had reservations about offering more investment to Heathrow in light of the CAA’s proposals.
He said: “[It] It makes me very skeptical about the appetite to bring more capital to Heathrow.”
Experts have also warned that any decision to cut funding was likely to involve plans for a third runway at Heathrow, with progress already disrupted by a sharp fall in air travel during the pandemic.
It comes amid continued chaos at Heathrow’s terminals after it struggled to find enough staff to meet demand for a return to air travel following the pandemic.
Heathrow was recently forced to impose limits on inbound and outbound flights due to staff shortages in a move that could lead to more flight cancellations.
The airport asked carriers to stop selling tickets for the summer holidays and imposed a departure limit of 100,000 passengers per day.
The west London airport told airlines it could limit flights until at least October 29 and threatened to sue airlines that did not reduce capacity.
Mark Powell, Heathrow’s director of operational planning, warned that the airport was introducing “contingency” measures to prevent “dangerous” grounding in the terminals.
The airport has reported a loss of £321m in the first six months of the year as it struggled with the return of travelers after pandemic restrictions were eased.
It blamed a lack of ground service staff for its problems and estimated there had been a 30% drop in staffing levels since the pandemic.
Madrid-based Ferrorival also controls Spanish infrastructure developer Cintra and has been investing in Heathrow Airport for 16 years. It bought an indirect stake of almost 56% in Heathrow in 2006 and eventually reduced its stake to 25% in 2013.
Ferrovial is Heathrow’s largest investor and is alongside the Qatar Investment Authority, which has a 20% stake, as well as the Caisse de dépôt et placement du Québec, Singapore’s wealth fund GIC and the China Investment Corporation.