RIYADH – The authorities in Saudi Arabia have decided to expand their footprint across Europe in the aviation industry through a unique purchase.
Saudi Arabia’s sovereign wealth fund is set to purchase a 10% ownership stake in London’s Heathrow Airport, Europe’s busiest airport.
Interestingly, the acquisition involves Saudi authorities acquiring the share from Spain’s Ferrovial, while Paris-based Ardian will obtain a 15% stake, amounting to £2.37 billion ($3 billion).
The transaction is orchestrated by the Public Investment Fund (PIF), overseen by the kingdom’s crown prince Mohamed bin Salman who has also launched a new airline and is also spearheading the Vision 2030 project of the kingdom under which a new city Neom would also be set up.
The Spanish Ferrovial has held its stake since 2006 but Saudis would now be having their share subject to some regulatory conditions.
Heathrow’s parent company TGP Topco has a diverse ownership structure with many players from the Middle East having stakes in the facility.
According to Airports Council International (ACI), Heathrow Airport is the 8th busiest airport in the world, witnessing 61,614,230 passengers last year compared with 19,395,287 in 2021; the airport is not in profit and stats confirm that it has more than £14 billion (approximately $17.7 billion) in debt.
The buying of stakes in the airport seems to be the plan of the ambitious crown prince known as MBS who had also announced the launching of a new national airline, Riyadh Air, with Tony Douglas as its chief executive.
The kingdom moves to compete with regional transport and travel hubs and for the same purpose, it seems to be exploring new markets and facilities.
Riyadh Air will serve more than 100 destinations around the world by 2030, making use of the kingdom’s location between Asia, Africa and Europe, as per state news agency of the kingdom.
Saudi’s Public Investment Fund is one of the world’s most active sovereign wealth funds and has over $700bn in assets due to the kingdom’s reliance on oil.
