- Author, Douglas Fraser
- Role, Business and economics editor
Edinburgh Airport is taking off on a new route as it comes under the control of a French company that claims to be the world’s largest private airport operator.
The new owner, Vinci, is supporting the airport’s business, which has rebounded strongly from the pandemic and expects to reach record passenger numbers this year and grow by another third over the next six years.
Paris-based Vinci owns 70 airports worldwide, including London Gatwick and Belfast International – and has now confirmed the transfer of a 50.1% stake in Scotland’s busiest airport for £1.27bn.
That means Edinburgh Airport’s value has more than tripled in the 12 years since the continuing co-owner, GIP or Global Infrastructure Partners, bought it for a whopping £807 million.
That was the amount paid to BAA, which inherited Edinburgh, Glasgow and Aberdeen airports from its nationalized predecessor, the British Airports Authority, along with Heathrow and Gatwick in London.
These airports have since become highly prized sources of profit for huge investment funds, competing for business where BAA previously stifled competition and growth.
For the investors behind GIP, who had a time-limited stake in Edinburgh Airport, the tripling of the valuation is not a clear gain.
Edinburgh Airport has invested heavily in expansion over the years, as regular users will know from the many building works over the years. And the work continues.
The £1.27 billion value for half of the airport means a total value of £2.5 billion, a remarkable achievement just four years after the pandemic hit aviation harder than any other sector.
The airline IATA has calculated that global losses in 2020 reached almost $138 billion (£109 billion at current exchange rates).
The rebound was extraordinary.
The Civil Aviation Authority says the number of passengers at UK airports fell from 300 million in 2019 to 65 million two years later.
Two years later, in 2023, the number of passengers passing through the terminals increased again to 276 million.
UK aircraft movements fell from 2.3 million in 2019 to 800,000. Back to 2 million.
Occupancy factor – a key metric for the industry, measuring the proportion of seats occupied – fell from 84% to 57% last year and rose to 82%.
Passenger numbers at Edinburgh Airport rose by 28% to 14.4 million last year and are expected to surpass their previous peak this year.
Teesside and Heathrow were the only major UK airports to grow faster.
Edinburgh is close to Heathrow as the busiest airport for domestic UK passengers, with 4.3 million last year at the London hub’s 4.6 million (although only one in 17 passengers are on domestic UK routes).
And despite tensions to reduce fossil fuel consumption, the expansion continues.
By 2030, the management of Edinburgh is planning an annual increase in the number of passengers to 20 million.
That’s an increase of a third, which is about the same number as Scotland’s entire five million population.
This never-ending device development is not without growing pains.
Peak staffing has been a struggle in the tight post-pandemic job market, leading to long waits to get to safety. There was industrial strife and a great accumulation of baggage.
The declining share of business air travel has also led to longer delays. It used to be half of the passengers.
Leisure travel now accounts for two-thirds of those going through security, and holiday travelers are taking longer to comply.
However, they spend a lot in the airport terminal, which is why critics of airport expansion point out that passenger terminals are more interested in running shopping malls, restaurants and bars.
Further expansion will put more pressure on ground transport, which already produces 16% of the airport’s total carbon footprint.
Only 37% of air travelers use public transport to and from the airport, less than the five major airports around London, while 40% use cars and 9% use taxis.
A parking charge and a “kiss and fly” departure charge is not only to make a lot of money for the airport, but to encourage the use of public transport.
The aim for 2028 is to achieve 7.3 million public transport passenger journeys to and from the airport and 2.8 million off-road car journeys around the Ingliston campus.
The airport offers to build a new link and cycle path, connecting to the city’s Gogar roundabout, and hand it over to the city council.
But it has run into planning delays because much of the airport’s growth runs counter to city and national goals for reducing greenhouse gas emissions.
The airport sector has responded to this threat by investing in low carbon activities in its ground operations and there are plans to invest in new fuel capacity.
As the area is targeted for housing expansion in Edinburgh’s hot property market, airport managers are considering the potential of a district heating project serving more than 10,000 nearby homes.
There is a large solar farm next to an airstrip in Edinburgh, while the sector looks to both engine manufacturers and airlines to develop SAF – a sustainable jet fuel made from crops, cooking oil and synthetic chemicals – for commercial viability and the necessary scale around the world.
This is the only way aviation can hope to meet net zero targets. Vinci’s new co-owner wants to reach net zero later than most, in 2050.
Edinburgh’s growth has not gone unnoticed towards the other end of the M8.
Glasgow Airport has also bounced back from the pandemic but has slightly more than half the number of passengers as Edinburgh and growth was much slower last year at 13%.
Glasgow retains Emirates’ lucrative link with Dubai, but in fierce competition to attract long-haul airlines returning to Scotland after the pandemic, Edinburgh has secured links with Hainan in China, Istanbul, Qatar, two airlines connecting to Toronto and six. last year scheduled US destinations to Glasgow seasonal destination.
One of Edinburgh’s advantages is the city’s brand, which is instantly recognized in overseas marketing.
It also benefits from being close to the center of the central belt, on a ground transport network that is more accessible to more of Scotland than Glasgow Airport.
And the Glasans noticed it. The number of Edinburgh Airport parking bookings made by people with a Glasgow postcode has more than tripled since 2019, with a fifth of such bookers now coming from the area beyond Harthill in west central Scotland.