London City Airport up for sale at estimated £2bn

US-based Global Infrastructure Partners (GIP) is set to put the London City Airport on sale at estimated prices of about £2bn (€2.9bn, $3.1bn).

GIP, which has owned the airport since 2006, said it is appointing advisers with the target to complete the sale of the airport in 2015. People familiar with the business told the Financial Times that the airport could fetch as much as £2bn.

GIP bought the airport for an estimated £750m in 2006 from Irish financier Dermot Desmond. The fund owns 75% of London City, with Oaktree Capital owning the remainder.

The US fund, which also has stakes in London Gatwick and Edinburgh airports, is trying to capitalise on the rising demand for air travel from business travellers, and the strategic location of the airport.

"The market demand for quality airports is very high," Michael McGhee, director for transport at GIP told FT.

London City Airport is the only airport actually located within the city. It is just 22 minutes from Bank station and is closer to the financial centre at Canary Wharf. An ideal point for those who need to fly in and out of London, the airport has almost two-thirds of its passengers as business travellers.

The airport handles planes that are flying to European destinations such as Amsterdam, Dublin, Madrid and Florence.

The higher price tag for the airport represents its unprecedented growth in passenger traffic. London City Airport's passenger numbers have doubled over the past decade from two million in 2005 to an estimated 4.1 million in 2015.

The airport has been planning a £200m expansion to raise capacity to six million passengers by 2023. Even if it received planning permission from Newham council in February, Mayor Boris Johnson blocked the plan. The airport is appealing the decision.