France clears airports for sell off

4th October 2004, Comments 0 comments

PARIS, Oct 3 (AFP) - French airports are set to be opened to private investors after the centre-right government unveiled privatisation plans last week, stirring anger among trades unions and the opposition.

PARIS, Oct 3 (AFP) - French airports are set to be opened to private investors after the centre-right government unveiled privatisation plans last week, stirring anger among trades unions and the opposition.  

Transport Minister Gilles de Robien unveiled a bill at a cabinet meeting that would allow for the capital of the main French airports to be opened up to private investors, and some big regional airports could be sold outright.  

The bill, which is to be submitted to parliament in November, calls for the statutes of Paris airport operator, Aeroport de Paris (ADP), to be changed, making it an incorporated company at the beginning of 2005.  

Secondly, the bill would allow for a dozen regional airports used for national as well as international flights to be privatised. Although the list of regional airports has not been finalised, it is likely to include those serving Bordeaux, Nice, Lyon, Toulouse and Strasbourg as well as other smaller cities.  

Although the state would retain a controlling majority stake, ADP's shares could be floated on the stock market as soon as March 2005.   ADP operates the vast Charles de Gaulle airport north of Paris, and the Orly airport south of the capital as well as a dozen smaller airports in the region.  

The company took a knock earlier this year after a terminal in the Charles de Gaulle airport collapsed on May 23, killing four people.  

But Robien said the timeframe of March 2005 would hold despite the accident.   He said of the overall plan: "The schedule for the different changes in capital is not at all affected by this terrible accident," he said coming out of the cabinet meeting.  

He also stressed that the state would remain a majority shareholder and that legislation would need to be passed for state control to be relinquished.  

The changes could have important implications for the development of small regional airports, run by quasi-state Chambers of Commerce and for the regions they serve.  

Irish low-cost airline Ryanair has abandoned flights to Strasbourg because Air France successfully challenged agreements it had made with the local airport and regional authority under which it received money for each passenger it brought in.  

Air France argued that this was improper use of public money. The low-cost airlines have reinvigorated several small regional airports and have boosted local economies in some areas, including the market for second homes. However, many of the more than 100 small airports are struggling financially.  

Under complicated arrangements for the small airports, the state would have an interest of more than 50 percent at first. But a member of Robien's staff said that the bill "does not say that the state remains with a majority... in the long term, anything is possible."   Unions objected to the overall strategy.  

"As was the case with France Telecom and Air France, each part privatisation eventually leads to the state giving up control," the secretary general of the Force Ouvriere, Serge Gentilli, told AFP.  

CFDT union representative at Roissy, Brigitte Recrosio, said: "Even if the bill calls for the state to remain a majority shareholder in ADP's capital, if we are floated on the stock market anybody can buy 33 percent of the capital and get a minority blocking stake."   Unions were also wary of a clause in the bill under which ADP employees would keep their civil servant status.  

But the company said in a statement: "This bill reconciles the values of public service and corporate economic balance."  

The opposition also struck out at the whole plan.  

"While the whole air transport sector undergoes a deep restructuring in our country and remains in convalescence at the international level... it is absurd to want to transform this public establishment (ADP) into a corporation and then open the way for the privatisation of this formidable tool," the Socialist Party head of business matters, Marie-Noelle Lienemann said in a statement.



Subject: French News

0 Comments To This Article