Article: Airtrain set for sale to British pension fund for $109m

[ozbob]

From the Couriermail click here!

Airtrain set for sale to British pension fund for $109m

Airtrain set for sale to British pension fund for $109m

    by: James McCullough
    From: The Courier-Mail
    December 22, 2012 12:00AM

BRISBANE'S Airtrain, which now ferries nearly 1.8 million passengers annually between the airport and the CBD, has been slated for sale to a British pension fund for $109 million cash.

The train, which is owned by a group of institutional and private investors, has been acquired by a wholly owned subsidiary of Universities Superannuation Scheme Limited (USS), a UK fund which has $53 billion in assets under management.

The deal has been recommended by the Airtrain board, chaired by Mike Pelly, and is subject to shareholder approval at a series of three meetings in the next few weeks.

Mr Pelly said the deal was expected to be completed by April next year, subject to the necessary approvals.

USS is an experienced infrastructure investor with a long track record of investing in assets such as Airtrain.

It is the largest shareholder in the ConnectEast toll road in Melbourne and it is also an investor in Sydney's Airport Link.

"This is a great deal and the best result we could have hoped for," an upbeat Mr Pelly said yesterday.

"USS has good experience in this sector and it is good for all the shareholders."

The major shareholder, RBS, which holds about 34 per cent of Airtrain, had its stake on the market but had no success in selling it. The Airtrain board subsequently engaged Rothschild to seek out buyers and the group introduced USS to the deal. Other major shareholders include John Laing from the UK; Transfield; TransDev (now Veolia); Colonial; AMP; Macquarie; and some smaller private individual investors.

Airtrain is an unlisted public company.

The first train ran on May 5 2001. After losing money for many years, the company moved into the black in 2008, notching up a $4.8 million profit and paying a dividend of $1.95 to shareholders.

The train is now subsidised by the Queensland government. It cost $220 million to build, financed entirely by the private sector, making it one of the few known profitable public transport systems.

Mr Pelly said since 2007 underlying passenger trips had grown by a compound annual growth rate of 8.4 per cent.

In September, Airtrain reported a 25 per cent increase in full-year profit to a record $15.7 million and anticipated that the opening of the Airport Link tunnel would have little impact on its financial outlook in the year ahead.

Mr Pelly said Airtrain was now a mature and secure business meeting 95 per cent of the flights, with 7 per cent of market share for all transport to and from the airport.

"The sale price is compelling and demonstrates the attractive investment attributes of Airtrain and its status as a key piece of transport infrastructure that underpins the rapid growth in Brisbane and southeast Queensland," Mr Pelly said.

"I believe that Airtrain will be in very good hands with this new owner.

"USS is a large global infrastructure investor with a very long-term investment horizon."

Mr Pelly said the sale came on the heels of the business looking at extending its operating hours of services.
The Airtrain fare is $30 return, or $28 for a discount fare, and the train runs every half hour from 5am to 10pm, and every 15 minutes in morning and afternoon peak hours.

"Airtrain's characteristics are particularly attractive to USS given our focus on long-term, stable, inflation-linked cash flows," said Gavin Merchant, USS Senior Investment Manager, Infrastructure.

He said the deal would be fully funded by equity, providing the company with a stable capital structure to deliver long-term sustainable value to its stakeholders.

[Derwan]

Private rail line:  Sold as an investment
Private toll road:  Goes into receivership

[ozbob]

This might be a positive move in the sense that hours of operation might be expanded, dedicated train sets designed for airport services introduced, and frequency improved?

You never know ....

[somebody]

Private rail line:  Sold as an investment

For half the cost of building it, and far less than that in discounted cash flow terms.

I think it might have been built before its time.  It was feeding into an awful network in 2000 or so.

This might be a positive move in the sense that hours of operation might be expanded, dedicated train sets designed for airport services introduced, and frequency improved?

You never know ....

They could hardly make it worse.#

[#Metro]

This might be a positive move in the sense that hours of operation might be expanded, dedicated train sets designed for airport services introduced, and frequency improved?

I don't believe that dedicated train sets are necessary. Increased frequency is. I routinely fly in to Brisbane Airport and by the time I clear baggage check etc, I often miss the train by 2-3 minutes which is so irritating.

A station at DFO is worth looking at; that place is really going well in terms of travel demand.

[HappyTrainGuy]

Dedicated train sets... unlikely unless they build their own mtce facility and stabling or strike up another deal with QR.

[petey3801]

by the time I clear baggage check etc, I often miss the train by 2-3 minutes which is so irritating.

I swear there is some sort of conspiracy theory in this, something to do with the taxi drivers/BAC (for parking payments) colluding with the baggage handling staff...! The exact same thing happens to me, i'm waiting at the baggage claim, watching the clock and, without a doubt, by the time my bag comes around, the train has just departed and i'm in for a 29min wait till the next departure... 

[#Metro]

Wouldn't it be amazing if you could check in and tag your bag at Roma Street, head to the airport, just drop the bag and go?

[Mr X]

I think QANTARSE have a Q chip available for people's bags where your flight info is stored electronically and no paper tag is required. Check in online, drop your bag off and go to the departure gate.

[Jonno]

Run both types of services.