newcastle airport front with airplane in sky

The announcement that Newcastle Airport in the UK is being up for sale, has seen Saudi Arabia’s Public Investment Fund (PIF), tipped as the favourite to bid for a 49 per cent stake in the transport hub.  

PIF secured a 15 per cent stake in London Heathrow on 12 December, alongside French private equity firm, Ardian, which secured a 22.6 per cent stake in the airport. The combined 37.6 percent stake in the hub from Ferrovial is reported to be worth a total GBP 3.26 billion.

The announcement that Newcastle Airports is now also up for sale is the latest in a flurry of UK airport takeovers with London City, Birmingham and Bristol airports also announced as being up for sale by their Canadian pension fund owner, last month.

Business opportunity

Serving the UK’s North East region, Newcastle is the 11th busiest airport in the UK and reported its “best ever” financial results with the submission of its 2023 annual accounts. The airport saw around 4.9 passengers passing through its doors in 2023 and is hoping to exceed the five million passenger mark this year. Total revenues for the airport in the 2023 financial year increased 22 per cent to £79.1 million, while operating profit grew 36 per cent to £33.9 million. According to The Times, the airport is worth GBP1 billion.

The proposed takeover would see a new investor acquire a 49 per cent stake in the airport from InfraBridge, with the remaining 51 per cent under the control of seven local authorities: Newcastle, Gateshead, Sunderland, Durham, North Tyneside, South Tyneside and Northumberland.

PIF already has an interest in the region having acquired Newcastle United Football Club in October 2021.

Multiple UK airports up for sale

In addition to the multiple airports in the UK that are currently up for sale, the owner of AGS Airports (which operates Aberdeen, Glasgow and Southampton airports) confirmed in November that AviAlliance has acquired the airports from Ferrovial and Macquarie in a deal worth GBP1.53 billion.

With airports in general experiencing ongoing growth in passenger traffic and increasing demand for air travel in the post-pandemic era, many UK hubs are expecting to record their busiest year ever in 2024. Commenting on the Heathrow acquisition of a GBP 3.3 billion stake, the Chancellor of the Exchequer Rachel Reeves MP, said that attracting foreign investment to UK shores supports the country’s goal of delivering economic growth in every part of the UK to improve living standards.

“It’s a strong vote of confidence in the UK and comes on top of the GBP 63 billion of investment secured from international investors earlier this year, showing Britain is back in business,” she stated.

Leave a Reply