Coup de club for the two privatized airports of Toulouse and Nice

The Administrative Court of Appeal has annulled, on Tuesday, April 16, the procedure of selection candidates for the purchase in 2014 of a 49% share that the State held in Toulouse airport which had led to the transfer of control of the airport to Chinese shareholders. They try to resell this participation today. Last week, the airport gendarme, the ASI imposed a 33% drop in Nice airport fees billed to airlines.

It is not good to be a shareholder of one of the three privatized French airports. In the wake of the vote on April 11th of the Pact Act which includes the privatization of ADP, the Italian group Atlantia, majority shareholder of the Nice airport (49.9%) and the Chinese consortium Casil, shareholder in the same proportions from Toulouse airport, both come to take a big hit behind the head.

Cancellation of the selection procedure for candidates
In Toulouse, while Chinese shareholders were in the process of reselling the share they had bought in 2015 to the state, the Administrative Court of Appeal, seized by three unions, canceled Tuesday the decisions on the selection of candidates for the purchase of shares of the State in 2014. Opposed to privatization, the CGT, FSU and Solidaires argued that the “indicative offer” (initial) had been filed by Casil associated with SNC Lavalin, but that the final offer was only submitted by the Casil group.

The court on Tuesday ruled on this point and “overturned the decision to cede to Casil Europe” the shares of the capital, “the authorization of the Minister for the Economy of 7 April 2015 and the ministerial decree of April 15, 2015 “.

“It’s the procedure of selection of the candidate which has been canceled, not the sale in itself.For the sale, it is the court of commerce of Paris which is entitled to take a decision.I will seize it in the weeks to come “, he added.

For the departmental adviser Pascal Boureau who represents the department of Haute-Garonne on the board of directors of Casil, “it freezes the alleged project of sale” shares of the Chinese shareholder. “Potential buyers will look twice.”

According to our information, Casil had selected two finalists, Eiffage and Ardian in partnership with local banks and saw the turn of the file, “it would be furious madness if they continued,” says a banker, hoping “for them that they have exit clauses in the face of this type of event “.

ASI, the nightmare of airports
Especially, with the tightening of airport regulation as illustrated by several decisions since the beginning of the year of the ASI, the independent supervisory authority. And in particular that concerning the airport of Nice which caused a real earthquake in the sector. The ASI has announced last week that it imposed on the airport a reduction of airport fees billed to airlines by 33%.

After having twice refused at the beginning of the year to approve the airport’s rates because of the impossibility of evaluating their evolution compared to the rates for the years 2017-2018 which had not submitted for certification, the ASI set the airport rates that had not changed since 2016. Calculated rates applied in 2017 and 2018 were much higher than they should have been. they must cover the cost of the service rendered This principle was recalled to justify a refusal to approve at the beginning of the year the first version of the ADP 2019 tariffs and the Marseille airport. At the airport in Bordeaux, the ASI will decide by the end of April on the proposed rates for 2019, after two years without application for approval.

What future for the ASI?
Everyone finds in the decision of the ASI in Nice a symbol. For proponents of airport privatization, she shows that privatization is not a problem if it is accompanied by strong regulation. For the airlines, this decision reveals the tariff drifts of the airports which they fight for years. For the airports, on the other hand, the decision of the ASI, which comes after ADP, the manager of the Paris airports, to revise downward its proposed increase in royalties in 2019, reflects the need to change a inappropriate, inconsistent and inequitable regulation.

According to several observers, the tightening of the ASI is not good news for the state in view of the sale of its stake of more than 50% in ADP. This Tuesday, at a press conference, the SCARA, the union of autonomous airlines, expressed fears to see the ASI replaced by another authority.

“Before finding an expertise like the one acquired by the ASI, it will take 3 or 4 years,” said Jean-Francois Dominiak and Jean-Pierre Bes, respectively president and secretary general of Scara, is “after the signing of the next economic regulation contract (CRE) for the period 2021-2025 “.

This, even if the other authorities, like the Arafer (the policeman of the rail and highways), use the methods of calculation that the UPS.

After the adoption of the Pact Act authorizing the privatization of ADP, the government has planned to define the framework of regulation in an ordinance.

The importance of regulator is huge. Because he will have to give an opinion on this next CRE which is to be signed next year between the State and ADP. This CRE will determine the amount of investments to be made on the regulated perimeter (the aeronautical activities) and the ceiling of the royalties not to be exceeded to finance them. Like all CREs, the calculation of the weighted average cost of capital (WACC) will be crucial. By presenting its project on April 2, ADP launched the process of developing the next CRE. The Scara denounced this anticipated schedule.

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