GCC investors sought for French airport stake

08 July 2015

Government to sell 60 per cent stake in Nice’s Cote d’Azur airport immediately

  • Law to allow sale to be signed on 9 July
  • Value of total shareholding is $1.65bn
  • Emirates is airport’s key partner; discussions ongoing with Qatar Airways and Saudia for direct Nice routes

The French government is putting its stake in the Cote d’Azur airport in Nice up for sale to private investors. The preferred investors are airport entities and operators or infrastructure-focused funds including those based in the oil-rich GCC states.

Dominique Thillaud, CEO of Aeruports de la Cote D’Azur, tells MEED the French government is expected to sign a law on 9 July that approves selling its stake in key airports such as Cote d’Azur, where it maintains a 60 per cent stake.

This will be followed by the first round of tender, most likely to commence in September, where the government will accept non-binding offers from consortiums or interested buyers. A second and final tendering round will follow where shortlisted companies are expected to make a binding offer. The entire process is expected to take no more than six months, which means a consortium of companies will be taking over the 60 per cent government stake by the second quarter of 2016.

The remaining 40 per cent stake in the Cote d’Azur airport is owned by the Nice Chamber of Commerce (25 per cent), the city of Nice (5 per cent),  Alpes Maritimes (maritime department; 5 per cent) and the regional council (5 per cent). These four entities will be deciding within the next few weeks whether they will, like the state government, decide to monetise their shareholding in the airport. If they decide to sell, the total shareholding value is estimated to reach about €1.5bn ($1.65bn).

Thillaud says Dubai’s flag carrier Emirates Airline is the airport’s top long-haul airline partner, accounting for 200,000 passengers in 2014.

He also stresses that the Middle East remains an important source of opportunities for Nice. The airport management is currently in discussions with Qatar Airways for the resumption of its flight to Nice, and in a more preliminary level of discussions with Saudi Airlines (Saudia) for the opening of a direct flight to the famed summer capital.

Thillaud also comments on the ongoing open skies dispute between the US Big 3 and the Gulf airlines. “This is not just an aeronautical issue,” he says. “It is an issue that is directly linked to growing a country’s economy. Our stance and that of the Airports International Council (ACI) of Europe is to promote air traffic rights liberalisation to facilitate economic growth.”

In line with the liberalisation initiative, the Cote d’Azur airport has decreased its landing, parking and passenger’s fees by 2.5 per cent this year, and has adopted a 10-year freeze on new tariffs to increase its competitive advantage against other airports both within France and in the broader European region.

The Cote d’Azur airport has consistently posted a net profit from 2011 to 2014, and its net revenues increased by 66 per cent over a two-year period. Passenger traffic rose by 4.2 per cent to reach 11.7 million. The airport’s terminal 1 is currently undergoing a renovation and similar renovations will be undertaken for terminal 2 in order to improve passenger and cargo services. It has also shifted to using 100 per cent renewable energy in the beginning of 2015, sourced from the French hydraulic production company.

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