TBI targets remaining shares in Luton airport

Lorna Strickland

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The group hopes to capitalize on recent growth in the low-cost sector as it announces a 64% rise in six-month operating profit

UK airports group TBI has announced plans to purchase the remaining 28.6% stake in London Luton airport. The group is to offer £67.3m ($124.6m) for the airport, which recently gained approval through a government white paper to expand capacity to 30m passengers. The airport has grown traffic from 4.4m annual passengers when TBI acquired its current holding in 1999 to 6.9m for the year ended March 31 2004.

The group has announced interim six months results for the period ending September 30, showing a 64% rise in operating profit, to £24.1m ($44.6m), from 4% growth in group turnover to £107.6m ($199m). TBI's other airport interests include Belfast International and Cardiff International airports.

TBI CEO Keith Brooks said that Luton was well placed to capitalise on the continuing rise in low-cost travel, with both Ryannair and EasyJet confirming they will be routing more aircraft to the airport. "This is an important transaction which will allow us to realise fully Luton's potential as London's fourth airport, to capitalise on the growing demand for air travel and low cost travel in particular," said Brooks. "It will also provide us with greater financial flexibility."

TBI's offer is subject to approval by its shareholders.