Government to nationalise Heathrow?


It's not a good month to be an airport operator. First we heard that everyone who wanted to buy Gatwick had turned out to be chancers with n'ary a penny to rub together; now a small clause buried in the sort of document no one ever reads (BAA's financial report) reveals that the Government is so worried about BAA's finances that it's ready to take control of the airports should BAA or Ferrovial go bankrupt.

BAA almost went to the wall earlier this year, but scrapped together the mother of all refinancing deals. It's also just narrowly avoided making less than it expected, which would have worried investors no end. Last October BAA predicted that its "adjusted EBITDA" would be no more than 5% below £1,015m, or at least £964m. It only just scrapped through with an adjusted EBITDA of just £968m. Failing to do so would have spooked creditors and lead to loans being withdrawn at the earliest opportunity.

The Department for Transport has been reviewing how it regulates the airport owner, and BAA told its investors that it expects to be subject to a "new duty on the regulator to ensure that licence holders can finance their activities". No money, no license, no airport. Not only does BAA have no money, it owes £11.4 billion to various creditors - the equivalent of at least three bankers' annual bonuses.

People of Britain: you remember the seventies. Rubbish pilling up in the streets, oil shortages, strikes, the three-day week and bloody ABBA. A nationalised airport would clearly be exactly the same. There's only one thing you can do to stop it: fly early, and fly often.