Speculation is increasing that UK councils are looking to sell their stakes in UK airports. Reports have suggested that Birmingham City Council is already in talks with a Middle Eastern investment group over plans to sell their share in Birmingham Airport.
With Birmingham Airport currently the sixth busiest airport in the United Kingdom, and worth a reported sum of £870 million, airports are an obvious target for some councils already under the strain of dealing with lost money following the collapse of Icelandic banks and now likely to see their funding decrease and expenditure increase during the current economic climate.
Although the council in the UK’s second city is the only one that is currently actively involved in talks with potential suitors, Birmingham City Council is certainly not alone in its desire to raise funds through the sale of capital. Liverpool City Council has recently released a statement which announces their intention to conduct an “ongoing review of assets”, suggesting that they may seek to raise funds through the sale of Liverpool Airport. Furthermore, it is thought that several other councils are assessing the relative pros and cons of selling council stakes in airports, something that could lead to UK airports being placed in the hands of foreign investment groups.
With pressure apparently building with each passing day on UK councils to trim their budgets and reduce the massive deficits they face, selling stakes in important public services such as airports seems an increasingly likely and perhaps necessary occurrence. However, although such a sale would allow councils to raise a significant amount of money, it could leave them without an important and relatively reliable source of future income.