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The infrastructure arm of Citigroup, the American banking giant, has joined forces with Vancouver Airports Authority in an attempt to make a successful bid for London’s Gatwick Airport. The British Competition Commission announced earlier this year that the British Airports Authority must sell three of its airports and the bid from Vancouver and Citigroup, estimated at over $3 billion, is just one of several expected to be announced over the coming weeks.

Some bids have already been made public. Virgin Atlantic Airways, Hochtief AG (a German construction company), Fraport AG (the operator of Frankfurt airport), RREEF Alternative Investments (the infrastructure arm of Deutsche Bank AG) and Manchester Airports Group have all expressed interest in acquiring the airport.

Gatwick is the second biggest airport in the United Kingdom and the world’s busiest single-runway airport. Approximately 35 million people used the airport last year and the chief executive of the British Airports Authority, Colin Matthews, has spoken about the disappointment felt by those who had to make the decision to sell the airport. Matthews revealed that Gatwick had “long been an important and valuable part of BAA”.

Vancouver Airports Authority and Citigroup have worked together before successfully. Citi Infrastructure Investors, a unit of Citigroup, was handed a 50% stake in Vancouver Airport Services, which operates eighteen airports in numerous countries, earlier this year. Just last month, Vancouver Airports Authority was handed a contract worth approximately $2.5 billion to operate and further develop Chicago’s Midway Airport. This deal was carried out in accordance with Citigroup and John Hancock Life Insurance.

A recent inspection by the European Commission has revealed worrying security lapses at Gatwick airport. Staff there failed to spot a replica bomb hidden in an inspector’s hand luggage and fears have been expressed that the need to keep queues to a minimum may be compromising passenger safety. Under rules introduced in March, the airport authorities can be fined if queuing time at security is regularly five minutes or more. A follow-up test is due to be carried out within the next week.

The replica device was apparently flagged up by the scanners and the bag searched but it was then returned to the inspector because the member of the security staff did not realise what it was. According to an unnamed airport source, there is so much emphasis placed on searching for liquids that the basics are often overlooked. The same source also believes that computer generated images of banned items can cause a distraction for security staff. Experts in the field claim that because explosives are organic, it is often difficult to detect them and that staff have to concentrate on finding extremely small items such as timers, wires and detonators, which makes their job more difficult.

Several years ago, inspectors succeeded in getting fake guns and bombs through security at both Manchester and Stansted airports. A spokesman for BAA refused to confirm that the replica bomb had not been spotted although he was able to confirm that the inspection had taken place. The European Commission was no more forthcoming, refusing to discuss their findings.

Richard Branson’s Virgin Atlantic Airways have made it abundantly clear that they are interested in purchasing a stake in London’s Gatwick airport as part of a scheme to encourage an extensive restructuring of both conventional airports and the aviation industry as a whole. The news comes after the Competition Commission ruled that the British Aviation Authority (BAA) held a monopoly over British aviation and must relinquish up to three of its airports to the highest bidder.

Virgin Atlantic is one of the largest and most profitable aviation companies in the United Kingdom, earning an average of around £47 million a year. The company was founded in 1984 and has vied for supremacy over aerospace colossus, British Airways, ever since its inauguration. Richard Branson and Virgin Atlantic spokesperson Paul Charles have long petitioned for a complete re-think of the way airports are run, with the latter hopeful of a system that would allow airlines to operate airports independently. “It would make the experience for passengers so much better than it is today” Mr. Charles said.

The airline has expressed that it would only be interested in purchasing the airport as part of a consortium of other airlines but some groups fear that repackaging airports as a corporate plaything may jeopardise passenger safety. While the number of companies involved in the deal is still a matter of conjecture, some reports indicate that groups as diverse as the Dubai royal family may be persuaded to part with their cash for a slice of Britain’s second largest airport.

The proposed deal is still in an embryonic state but the total cost is expected to reach £3 billion.

The XL Leisure Group, which not only runs its own airline but also various tour companies, went into liquidation on Saturday, leaving 85,000 holidaymakers stranded abroad, some 200,000 facing the loss of their holiday and 1,700 staff without jobs. XL was the third largest travel company in the UK and is the biggest to go bust in twenty years.

It flew to 50 different countries, mainly in the Mediterranean, from 12 UK airports, although most of its flights operated out of Gatwick, Manchester and Glasgow. The company blames its demise on the rising cost of fuel, the general economic gloom and the inability to raise capital.

Although the CAA has been working hard to repatriate stranded Brits, many on specially chartered planes, those who had not booked a package holiday were less fortunate. With the ATOL protection not applying to separately booked flights and hotels, holidaymakers were very much on their own and many were facing hefty bills to fly back to the UK. Rival operators were accused of exploiting the situation, with huge hikes in prices for those trying to book alternative flights.

The demise of XL comes in the wake of trans-Atlantic carrier Zoom going into administration last month and the business-class carriers, Silverjet, Eos and Maxjet going out of business earlier this year. Meanwhile, Willie Walsh of BA warned that up to a further 30 airlines may go bust before the end of the year.

The Telegraph newspaper offered advice to holiday makers on how to safeguard their money, and gave details of the type of help that travellers could expect, depending on how they had paid and the insurance cover that they had taken out.

The Travel Insurance Guide has recommended a list of travel insurance providers who will cover you for the financial failure of your airline or accommodation provider. With the current economic climate, this is vital, so make sure you check it out before booking your essential travel insurance.

Strike action always comes at the wrong place and the wrong time but then that’s half the point. Last month the aviation industry here in the UK was saved from what could have been another total disaster, one they could have certainly done without, given their current rocky period.

Back at the beginning of August, baggage handlers and check-in staff at Gatwick and Stansted threatened to go on strike over the August bank holiday, which would potentially have caused major disruption for over 400,000 passengers. The staff of Swiss based firm Swissport were in dispute over pay and rejected a 3% pay rise. Although the airlines claimed they would have an adequate contingency plan in place to cope with the loss, nothing would be quite sufficient and, after the debacle at Heathrow this year things might have gone from bad to worse.

But talks were held and finally deals were done and the staff, who would have affected flights on some of the busiest airlines such as Ryanair, Virgin and easyjet, finally accepted a 4% offer that would be back-dated to April 1st. Unite, the union representing the workers, has announced that workers of Swissport will be pleased that this has been resolved with their demands being heard without the need for major hold-ups. There were fears that the strike would seep into Manchester and Glasgow too, but this too was fortunately avoided.

BAA is to airports what Coca-Cola is to the soft drinks industry: it pretty much owns the lot. All the big airports such as Gatwick, Heathrow, Stansted, Manchester, Glasgow, Aberdeen and more, are owned by the giant firm. However, things might all be about to change and the disastrous year that the aviation industry has had in the UK might be about to knock the school bully off his perch.

The muscle that BAA yields promoted an investigation from the Competition Commission, which concluded that such a monopoly on the industry was not healthy and that it might be forced to sell off some of its airports. This immediately set the business world alight and none more so than in the camp of that national treasure, Sir Richard Branson.

Branson is the ultimate risk-taker in terms of new business deals and has always been the same, irrespective of the millions in the bank. He pricked his ears up when Northern Rock were in trouble and now he’s pricking them up again with BAA. It’s not a bad idea to have one of the privately owned airlines in control of the airport; after all, they know the most about what passengers want and don’t want on a day to day basis.

The concern though is that such a deal from Virgin would mean we go from one monopoly to another. If Virgin owned Gatwick, then many of their rival airlines might worry that Virgin Atlantic would dominate the runways. However, Gatwick is big enough to be divided up and split amongst the airlines and this might end up being the best solution to the problem.

Airport staff working for Swissport are planning to strike at two London airports over the busy August bank holiday weekend, potentially leading to cancelled flights, long delays and stranded holidaymakers. Workers involved include baggage screeners, baggage handlers and check-in staff.

The strike is due to disputes over pay after workers rejected a 3% pay rise offer from Unite, the UK’s biggest manufacturing, technical and skilled persons’ union. The strike will also involve Stansted airport staff from other unions, including GMB, whose workers rejected a 1.5% payrise.

Airport staff claim they are struggling with the increasing price of living and are demanding a 5% rise, in line with the current increase in the retail price index. There are also calls for sick pay to be reintroduced for the first three days of absence resulting from illness.

The strike will affect Stansted and Gatwick with around 300 staff walking out for 24 hours on Monday, 25th August and possibly continuing on Friday, 29th August in other airports. Staff at airports in Manchester, Birmingham and Newcastle will vote on industrial action in the coming weeks.

The strike could affect up to 1.3 million passengers on Virgin Atlantic, First Choice, North West and Monarch flights as well as those from several smaller airlines and charter flights. However, Swissport say they are working with the airports and airlines to limit disruption to the general public.

Earlier this year, airport staff threatened to walk out at seven British airports but these strikes were cancelled after BAA changed plans regarding pension rights.

Never one to mince his words, London Mayor Boris Johnson has lashed out at Gatwick airport officials, calling the managers there "chimpanzees". Mr Johnson was furious after he and his family arrived back to chaos at Gatwick following a holiday in Italy.

A chronic lack of passport officers coupled with delayed luggage was the cause of his wrath, and the "snivelling" and "insincere" apology that he received in a standard letter which was handed out to passengers for the sixth night running did nothing to pacify him. In his usual humourous fashion he likened the hundreds of passengers “shuffling round the ox-pens” to “inmates of some Victorian penitentiary”. He then described the passengers’ offer to liberate their luggage which they knew was on the tarmac in an “Entebbe style raid”. Many of them had been waiting for two and a half hours but needless to say this offer was turned down on health and safety grounds.

Officials from BAA and Servisair were conspicuous by their absence but, in the letter, the delay in luggage arriving on the carousel was put down to staff shortages.

Mr Johnson has been outspoken in his concerns that with the London Olympics only four years away, Gatwick is going to have to get its act together. Spanish owned BAA may well be compelled to sell Gatwick if the Competition Commission rules that the stranglehold over the UK’s biggest seven airports should be loosened. It has been accused of ill-serving airlines and travellers alike and of putting shopping over the needs of passengers.

Mr Johnson was not the only politician to be put out by his Gatwick experience last week. John Prescott was reportedly seen as looking most perturbed when trying to check in at the Easyjet desk for a flight to Edinburgh. Given that his tickets were for the BA flight perhaps it is not surprising that he was not on the passenger list!

The British Airport Authority (BAA) is set to sell off a number of its airports after the Competition Commission published its preliminary report on 20th August 2008. BAA, which is owned by Spanish company Ferrovial, has a near monopoly on airports in Southeast England and Scotland. The company is responsible for over 60% of all flights to and from the UK (BBC News, August 2008).

The Competition Commission have recommended that BAA sells three of its seven airports, including two of its London airports and either Glasgow or Edinburgh Airport, after claims that BAA is unable to run all of its airports efficiently and is failing passengers with poor levels of customer service and long delays.

The findings come as no surprise to Sir Nigel Rudd, Chairman of BAA, the company which owns three major London airports as well as Edinburgh, Glasgow, Southampton and Aberdeen airports. However, Rudd also claims that selling Gatwick or Stansted will make little difference as neither airport poses a real threat to business at Heathrow Airport.

The move is welcomed by many major airlines operating in and around London. Virgin Atlantic and Ryanair have both expressed their support and Virgin is currently in talks with other airlines regarding joint ownership of Gatwick Airport. Ryanair are also reviewing their financial situation to see if it would be viable to purchase Stansted airport, the Irish company’s biggest hub.
Several international companies, including Manchester Airport Group and Global Infrastructure, have expressed interest in buying BAA’s airports as well, with Hochtief, a German construction company, and Australian bank Macquarie topping the list of potential buyers for Gatwick. Macquarie already owns Bristol and Birmingham airports.

The Competition Commission’s final report regarding the company’s future will be issued in April 2009.

Flights from the UK to the Canaries have been hitting the headlines recently for all the wrong reasons. First there was the family who was sent to Turkey instead of Lanzarote, followed closely by the case of the woman who managed to fly to Fuerteventura on her husband’s passport. Now a flight from Gatwick to Gran Canaria has been cancelled because the pilot’s licence had expired!

The Easyjet flight headed to Las Palmas last Monday had 200 passengers on board, all of whom were most put out by the cancellation, especially when they were informed by the airline that, due to limited availability, not all of them would be transferred to the flight due to leave the following day. Some holiday makers had to wait until the Saturday for an alternative flight although they could have opted to receive a refund, not always practical if you have accommodation booked at your destination. One family chose to pay over £3,000 to fly with another airline in order to salvage their holiday plans. A spokesperson from Easyjet said that it was the pilot’s responsibility to ensure that his licence was kept up to date.

A pilot’s licence has to be renewed every five years and competency tests taken every year. In addition, a medical examination has to be passed between every one and three years. Unless each of the three elements is fulfilled, the pilot is deemed to be flying illegally and can be prosecuted. Last year it was reported at the time of the Colin McRae helicopter crash that his licence may have expired two years earlier.