Financial crisis: AIG sells stake in London City airport


In an earlier post, we noted some of the effects of the AIG demise on the world of travel. Now, a new page has been turned in AIG’s reach into the travel world — the sale of their surprising 50 percent stake in London City airport.

This sale of London City airport factors into an unsettled landscape concerning airport ownership in Britain. The current owners of Heathrow, Gatwick and Stansted have been ordered to divest two of their airports by the UK’s Competition Commission. Now with London City airport in play and possibly being sold to one of the potential bidders for Gatwick, a new competitive dynamic emerges.

London City Airport is a smaller airport with runways only six miles from the heart of London’s financial district. Its traffic has rapidly grown to just over three million commercial passengers. It is far smaller than Heathrow, Gatwick or Stansted. However, the group purchasing London City airport, Global Infrastructure Partners (GIP) that once partnered with AIG has its eye on a possible Gatwick purchase as well.

For me, the biggest surprise is the depth of penetration of AIG’s tentacles into the travel industry beyond their insurance products and aircraft leasing operations.