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MAG wins Stansted Airport bid

London Stansted AirportManchester Airport Group (MAG) is due to complete its transaction to buy Stansted Airport from Heathrow Airport Holdings (formerly BAA Limited) by the end of next month. This £1.5 billion deal symbolises the continued rise of MAG, which owns three other airports and a property firm that add about £3.2 billion to the nation’s economy.

At the same time, the continued breakup of Heathrow Airport Holdings reduces its number of owned airports to four. Before the Competition Commission ruled that it sell some of its airports to break up its monopoly, the group owned seven in the UK. The commission’s ruling that the then BAA should sell Stansted, as well as either Edinburgh or Glasgow airports, was made in July 2011. The group resisted the ruling several times, but its legal challenges were unsuccessful. After selling Edinburgh Airport to Global Infrastructure Partners (GIP) in April last year (which followed the group selling Gatwick Airport to GIP in 2009), it has recently announced that Stansted Airport will be purchased by MAG.

Heathrow Airport Holdings board member and Heathrow Airport chief executive Colin Matthews says Stansted and its staff have been part of the group for a long time. The airport has been dubbed the best in the world for budget carriers by its passengers at the Skytrax World Airport Awards for two years in a row. They are proud of these achievements. The group hopes the new owners will have success with the airport and are confident it will continue growing. Matthews added that the group will continue focusing on their other airports, Heathrow, Aberdeen, Southampton and Glasgow.

MAG already operates the Manchester, Bournemouth and East Midlands airports, as well as MAG Developments, a commercial property firm. It is currently leading the development of Airport City, an Enterprise Zone at Manchester Airport. This is a £659 million expansion for the airport. The group runs airport security, car parking, motor transport, engineering, fire fighting and advertising businesses.

Stansted is the fourth busiest airport in the UK, carrying about 18.1 million passengers as of 2011; and in 2010, it recorded 155,140 aircraft movements. Budget carriers like Ryanair have major bases there, while there are 14 airlines total that use the airport and fly to over 150 cities across 32 countries. Its pre-tax profits were £86.6 million in 2011 and have been estimated at £94.2 million for last year. Manchester Airport is the third largest as of 2011, with 18.9 million passengers. In 2010, the airport recorded 159,114 aircraft movements.

London Mayor Boris Johnson has said Stansted Airport is the only practicable substitute to his idea of building an airport in the Thames Estuary, which would cost £50 billion. This comment was made in October, at which time he claimed it would be better to expand the single-runway airport to three runways rather than expand Heathrow Airport, and he has ordered a viability study into the mater.

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