Bid on Brussels International Airport

[sn26567]

For the first time in Belgium history they made a logical decision.

Well I guess that the government has learned the lessons from Sabena. Although they are 70% owner of BIAC, the latter is run like a private company, without meddling from politicians.

And, indeed, BIAC management (NOT the Belgian government) took the right decision.

And now: Macquarie (AUS) or Vinci (F) ? (and not Da Vinci, as I read elsewhere in this thread...)

[Flybe]

An article in "Het Laatste Nieuws" of 14/07 tells the same about Schiphol and Frankfurt not being on the shortlist, but also gives some new information:

Als potentiële kopers circuleren nog de namen van het Spaanse Ferrovial, de Franse bouwgroep Vinci, het Duitse Hochtief, de Australische financiële groep Macquatie en de durfkapitaalgroep 3i. Verwacht wordt dat de komende weken verscheidene partijen de handen in elkaar zullen slaan.

So potential buyers are the spanish Ferrovial, the french construction company Vinci, the australian financial group Macquatie and the "high risk investment" company 3i. It is expected that in the next weeks some of these companies will cooperate to do a conjoint bid.

Futhermore the article states that Schiphol isn't on the shortlist because of reasons of "price and competition".

Greets,

Pieter

[sn26567]

So potential buyers are the spanish Ferrovial, the french construction company Vinci, the australian financial group Macquatie and the "high risk investment" company 3i.

It is in fact Macquarie Airports (and not Macquatie), which is not a financial group, but an airport managing company that has intesrests in several airports in the world.

It is also rumoured that Vienna and Copenhagen airports are still on the list...

[Flybe]

It is in fact Macquarie Airports (and not Macquatie), which is not a financial group, but an airport managing company

Sorry. Well, actually i was wondering indeed, because i read already on Luchtzak that it was Macquarie airports (so the correct name and also that it was an airport managing company), but to be sure i decided to translate directly from the article. Should have known better, HLN isn't really known for good businessnews. Although they did give some new names of interested companies 8)

Anyway, nice to see that there is much interest, lets hope that some companies can bundle efforts! That should make things interesting!

Greets,

Pieter

[Avro]

Anyway, nice to see that there is much interest, lets hope that some companies can bundle efforts! That should make things interesting!

Well there should definately be some interest. BRu is the capital of Europe, has not reached its max. capacity, has a totally new terminal (A) while the B one is only 8 years old. and last but not least BRU is located in between 4 big world hubs.

Greetz
Chris

[Flybe]

According the the news this noon on TV1, the candidates for the takeover of BIAC are narrowed down to 2 candidates: The spanish Ferrovial and the Australian Macquarie, both already owning quite some airports around the world.

Who would be your favourite?

Greets,

Pieter

[sn26567]

According the the news this noon on TV1, the candidates for the takeover of BIAC are narrowed down to 2 candidates: The spanish Ferrovial and the Australian Macquarie, both already owning quite some airports around the world.

Thanks for this important news for the future of our national airport.

I think that both operators are excellent companies with a sizeable knowledge of airport management. May the best win!

[Avro]

According the the news this noon on TV1, the candidates for the takeover of BIAC are narrowed down to 2 candidates: The spanish Ferrovial and the Australian Macquarie, both already owning quite some airports around the world.

Who would be your favourite?

That's good news. I have no favourite, but I'm happy to see that Fraport and AMS airport aren't the candidates anymore...

Chris

[sn26567]

I'm happy to see that Fraport and AMS airport aren't the candidates anymore...

... and Vienna airport and Copenhagen airport! Indeed, all these potential candidates would have stolen traffic away from Brussels.

[Flybe]

And this is the original article, taken from the website VRTnieuws:

Nog twee mogelijke eigenaars BIAC

De Spaanse bouwgroep Ferrovial en het
Australische Macquarie Airports zijn de
twee enige kandidaten die overblijven
in het privatiseringsproces van BIAC,
de uitbater van de luchthaven van
Zaventem, bericht de krant De Tijd.

Zakenbank ING gaat met beide partijen
parallelle onderhandelingen voeren.

De Belgische staat wil zijn belang in
BIAC van 63,56 procent terugbrengen
naar 30 procent.

De andere privé-aandeelhouders moeten
nog beslissen of ze hun belang verko-
pen, consolideren of vergroten.

The articla says what i reported a few posts earlier.

The last sentence is strange: the other investors still have to decide if the will sell their shares, or buy more of them, or just keep them. If most of them don't sell it, the company that will eventually take over BIAC won't get a majority share. And i guess that they are only interested in a majority share. So i guess we can conclude that it is almost sure that the majority of private investors will sell their shares. Hopefully the government already arranged that, or they could have a very unpleasant surprise...

May the best win indeed!

Pieter

[Flybe]

Just heard on the radio that the Flemish government is thinking about taking a stake in BIAC, so that they can have more input in the strategical decision making process.

Now i am a Flemish person, but i really, realy hope that they won't do that! Governments shouldn't be involved in board of shareholders of PRIVATE companies! (well, biac is almost private).

I sure hope that they don't want a majority share. And even a small share is not good, because then more private investors should sell their shares to give Ferrovial or Macquarie a majority share of more then 50%!

Governments, you can never trust them to do the correct thing. :stop: A privatisation means less government owned shares, not more...

Hopefully they will not try to take shares, they are as deadly for BIAC as Schiphol/Fraport/... would have been.

Pieter

[Avro]

I agree with you Pieter. Governments are never or nearly never successful when involved in commercial company issues.

If the Flemish government would take some stakes in Biac, it'll certainly lead to a worser development of BRU.

Let's hope they don't find the money for it..

Chris

[sn26567]

Chris and Peter, I fully agree with you.

Why did the Flemish government (contrarily to Wallonia and the Brussels region) refuse to invest in SNBA when capital was badly needed, and suddenly finds money to invest in an airport that does not need it?

Again, politics at its worst! Hands off the National Airport. Let it be run by the private sector.

We have seen what political involvement meant for Sabena and DHL...

[Flybe]

So i listened again to the radionews, as i can't find any written news about it yet:

The Flemish government wants to increase employement in the region around the airport. Therefore they apparently already reserved some money. Now Chris Peeters, minister of public works, is investigating if they could have a participation that is large enough to have a significant influence with the money they provided for creating work overthere. The reason why they want a part of the shares is that it is of "strategic importance".

Someone should really tell those ministers what people think of them. I thought that in a democracy that Belgium is supposed to be, ministers were supposed to represent the people of the country! They seem to be doing the opposite.

Rant over 8)

EDIT: This is what i found on the site of VRTnieuws, in the topic about DHL:

Vlaamse regering wil regio verder ontwikkelen

De Vlaamse regering wil de hele regio rond de luchthaven van Zaventem verder ontwikkelen met het oog op meer werkgelegenheid.

Er worden meer bedrijfsterreinen in gebruik genomen en de Vlaamse regering onderzoekt ook of een participatie in Biac interessant zou kunnen zijn. Biac is de uitbater van de luchthaven.

Pieter

[SN30952]

Chris and Peter, I fully agree with you.
Why did the Flemish government (contrarily to Wallonia and the Brussels region) refuse to invest in SNBA.... We have seen what political involvement meant for Sabena and DHL...

And I disagree fully. 8)
For me, and many Flemish* too I think, the public sector has to be involved in harbours, energy- and transport infrastructures (highways, bridges, tunnels, canals, railway infrastructures...)
The UK learned its lesson well with its railways.
Even in the US, many airports and harbours are (part-) owned by (municipal, county, etc) governments. In the Far East it are the governments that decide about these big infrastructures. Even in an ultra-capitalist Singapore...
Financial involvements would give the public authorities more impetus iso red tape. Contrary to the socialist governed South of Belgium, the Northern Government is not involved in mastering the pieces. And some of the pieces are successful, as the Antwerp harbour, one of the 10 most important worldwide. They have that international expertise, which unfortunately cannot be said of the other governments. And that is probably the reason they would not get involved in helping create a new airline.
It is probably more useful to hold the steering wheel than the spare tyre of the vehicle. In some cases, as on a sinking ship it is more useful to hold a spare tyre, indeed.

* The Flemish government has never changed its position in this.

[killerwhale65]

Fons, don't you think that if the (Flemmish) government gets involved in the airport, it will ruin it? Governments seem to make a hobby of ruining aviation in Belgium, so why would it be different now? ALso the federal government, who is curently involved in BIAC if i'm not mistaken, did not manage to make the airport extremely successfull.

[B744skipper]

Governments combined with the private sector always are attracting problems. Simply because the main goal of the government is not to make profit. Just look at Sabena, I think that in they're history they only made in 2 years profit.
And I think that SNBA (which is a private company, right?) is doing hell of a lot better job.

Just look to the DHL-job that they did, it is clear that they didn't go for the financial point of view, but for the electoral point of view. I could see a goverment cutting back on the (night-) flights of an airport for pleasing the voters, but hurting the airport business itself.

[Avro]

And I disagree fully. 8)

I didn't expected you to agree with us

They have that international expertise, which unfortunately cannot be said of the other governments.

Do you really think that the flemish government has more "expertise" as you claim compared to the other governments in our country ? I don't think so. Just to name one of the 1000's of failures of the politicians in our country look at what happened to DHL. All governments in Belgium have proven that they firstly don't know a lot about aviation and secondly don't have the spirit to try to develop a healthy and prosper economical situation around BRU Airport. And to be honest I don't expect the flemish government to achieve this on the contrary !!!

The main reason behind the weak financial situation of state runned companies is that state owned companies don't have profitability as their first goal. First of all they will try to employe the highest number of people. They will reduce the profit margin to nearly 0 if not under it and will try to create as much jobs as possible. Anyway I'm not a economy genius, I'll let Pieter handle this part

Chris

[SN30952]

Fons, don't you think that if the (Flemmish) government gets involved in the airport, it will ruin it?

Do they ruin Antwerp harbour? Zeebrugge harbour?
No they make strong alliances, and that's not by coincidence with Singapore Harbours....
A spin off of all the government involvements is that Flanders is leading in dredging. Who made the island of new Hong kong airport?
As I said in the DHL forum, one needs a perspective. Build something that has a future. What else can we export than goods and services? If we give away (sell) one the major creation engines for new or applied technologies to foreign and private companies, what will be left for us? Small handling jobs? In such an airport the management and supervisors jobs as well as the decisions will be taken by foreigners, and we will have jobs as plumbers, security guards or cleaners?
This is what happened in the South, their decision makers are not in Wallonia.
The car industry in Flanders suffers the same inconvenient, decisions are taken in Koln, or elsewhere in Germany or Malmo. Look how it happened with Renault.

Selling your infrastructure is like eating your capital.
Finland has the same population, but has world brands, because it took measures with perspective.
No, no, the flemish government has a good perspective on that.
And an other thing, the flemish government has no lessons to get from others. Flanders no need mothers-in-law... killerwhale, and certainly not in-house mothers-in-law!

btw It is a pity Sabena went , but it can be replaced.

[Flybe]

Let me first say that, in my opinion, the biggest problem is that a government (any government) lacks long term views. They have medium term plans for 4 years. In the rare case that they do have long term (longer then 4 years) plans, the risk is real that after the elections (so after 4 years) there is another government with different parties and ministers… with different views. They would just erase the long term plans that the former government might have had. An airport can’t live with that as it requires a funded long term vision. Negotiations with airlines to come to BRU take long and be sure that in this economical environment they will take their time to evaluate everything necessary to be sure that they have as least as possible risk. Infrastructural decisions are even more of a long term view. From the moment that people start to think about expanding or replacing something until the time that it is effectively build, it takes quite some time, and you can’t change your mind every 4 years.

It is indeed high time that a framework on aviation and airports is set out in Belgium. But this has to happen by law, and not by 1 government owning 1 airport and other airports (e.g. Charleroi, …) by other governments. And the rules must apply for whole Belgium, that’s why it has to be a federal decision and made by law. Otherwise we scare away the last international companies we still have here, because they are getting confused by our governmental and administrative system!

Contrary to the socialist governed South of Belgium, the Northern Government is not involved in mastering the pieces.

The Flemish government has stated that they would like to own an important part of the shares, so they can play a role in the strategical decision making process.

In such an airport the management and supervisors jobs as well as the decisions will be taken by foreigners, and we will have jobs as plumbers, security guards or cleaners?

The majority of jobs at an airport are those kind of jobs (security, …) and only a relatively minor part is management. If those management jobs go to foreigners that know what it is to run an airport, I frankly wouldn’t mind them to have those jobs. The days of trying to keep everything in Belgian hands are over. In my opinion it is better that BRU would be under the management of specialized aviation management (Ferrovial and Macquarie fit the description perfectly, don’t you think?) than BRU would be managed by Belgian ministers who haven’t got the slightest clue about aviation. Sure they would be assisted by aviation consultants, but at the end it are still the ministers who would take the decisions, and you can’t teach a donkey to dance. (no offence to any minister, it is just that they aren’t specialized in aviation). Give me specialised people any day!

If we give away (sell) one the major creation engines for new or applied technologies to foreign and private companies, what will be left for us?

Actually, if the airport is guided by specialized people, who know what they’re talking about, BRU could well become a bigger creation engine than it was before.

Some international companies are more powerful than small nations such as Belgium. And that is a good thing, because by giving us a hard time and threatening to leave, they keep the country competitive and with their feet on the ground (although it can be sometimes painful, e.g. DHL).

The car industry in Flanders suffers the same inconvenient, decisions are taken in Koln, or elsewhere in Germany or Malmo.

Well, if our governments would want to take part in every car company in Belgium, they wouldn’t have any car company left here! Belgium has no car industry of its own! And I think that not many companies would appreciate Belgian governments wanting to take a part of their shares. And if Belgian governments want to take shares in all car companies in Belgium, our deficit would be rising and we would have even much more debt. Not to mention how German, Swedish, and other governments would think of attempts from Belgian governments to get shares of their big car companies. The time of trying to keep everything in Belgian hands is over.

Anyway I'm not a economy genius, I'll let Pieter handle this part

I’m just someone who graduated in economics, nothing special. Every opinion is valuable and welcome!

Anyway, that's just my 2 eurocents. Greets,

Pieter

Aaahh, just had that "invalid session" for the first time! That's horrible after writing such a text! Probably my first text was a little bit more funded, but now it's late and i'm tired. But the essence is still there 8)