Gatwick for sale

          Britain's biggest airport operator BAA sold Gatwick Airport to Global Infrastructure Partners (GIP), owners of London City Airport, for £1.5 billion to repay part of its' existing debt. 

GIP is paying £1.455m in cash for Gatwick, plus further payment of up to £55m. BAA hoped for a higher price of £1.8 billion, but the recession and the downturn in the airline traffic drove the price down.

The deal should be completed y December if details, including EU merger regulation clearance, are finalized. Remember, BAA has been ordered by the Competition Commission to sell Gatwick, Stansted and either Glasgow or Edinburgh airports by 2011.

Gatwick is the busiest single-runway airport in the world. It handles over 32.2 million passengers in the year to September, Market Watch informs. During the first half of the year, Gatwick earned £68.7 million before interest, tax, depreciation and amortization, on revenue of £217 million.

BAA will use the money from the sale to reduce its debt of £9.7 billion, BBC news reports. However, BAA's most important investee is London's Heathrow. "Terminal 2 is being rebuilt and ... this debt essentially come from the building of Terminal 5" is said in the source.

Already the owners of London City Airport, GIP, an infrastructure fund backed by Credit Suisse and General Electric, saw off a rival bidding group which included Manchester Aiports Group and Borealis, a Canadian fund. The observers believed the deal could lead to better service at the airport, because as it turned out recently the competition between airlines is enormous, but very little between airports.

According to GIP, they will modernize and upgrade the airport pointing out their success in operating London City Airport. Moreover, the group aims to work closely with the airlines themselves to provide best performance. This statement was welcomed by the airlines, but it also heightened the expectations of high-standard operating at Gatwick.

In the meantime, Times Online focuses the reader's attention on the fact the world's busiest single-runway airport is a record that its new owners would love to lose. The acquiring group cannot imagine expansion without a second runway, which, in my opinion, will damage the airport's reputation even more.

However, I believe that the authorities won't let to build a new runway before the new owners fulfill their promises and sort out all the mess in the airport. At the moment Gatwick cannot offer as many connecting flights as Heathrow, which makes the last more preferable y the passengers. Moreover, it should get back the looking and feeling of a passenger-friendly airport, because many people complain about the staff coldness and the awful parking. So there is a lot to improve and sort out besides legal issues, that's why I wish the future owners patience and good luck.

P.S. A little note - when I started reading the articles, it took me some time to figure our whether the airport has been sold already or was just in the process of negotiations. Thanks to Daily Telegraph i managed to sort it out. All other articles gave too many excessive details and created a mess. However, to understand the legal issues I highly recommend the Business week story that is more into the Competition Commission investigation and the reasons for BAA to sell three of its airports.

Google beats recession


              This Thursday anyone who is looking for the sings that the recession is over could've found them in Google's recent profit report.

The company announced a net profit of $ 1.64 billion for the Q3, which is a 27% increase compared to the same period last year. Total revenue reached $ 5.94 billion, up to 7% of last year's figures and over three times the predicted sum of $ 1.29 billion. Moreover, this is the slowestfastest growth pace since the company went public, states the Associated Press article.

Eric Schmidt, who hit the headlines this year when it was revealed he was a member of both the Apple and Google boards, believes that the financial fortunes of the global economy are changing: "The worst of the recession is clearly behind us, and because of what we have seen, we now have the confidence to be optimistic about our future". These words inspired the investors, and the company's shares rose 3.1% to  $ 546.35 (still below the peak of $ 750 in 2007, but well above its 52-week low of $247.30).

Analysts predicted Google to be on of the very first companies to witness the economic downturn changing as businesses put their faith in Google for advertising. It is well noticed in the CNN Money article that "when economic times are tough, people don't stop searching for things online, they just search for different things". Perhaps, that's the reason Google is doing much better than its insignificant competitors - Yahoo! and Bing.

Actually, Yahoo! managed to report increase in profits and sales only due to extensive cost cutting of firing 2000 employees. And the Microsoft's Bing is now too small to rival the giant empire of Google. Though i'm not sure Bing will really do well in future, as it keeps to the "too-smart" practice of all Microsoft products (the search engine tries to give you as few sites as possible, though they should be almost 100% agree to the thing you've been looking for).

Google's obvious advantage hides in its very convenient business model. The company develops and sales everything itself (67% of earnings are gained from Google's own sites). The expenses endured are mainly on staff and technology development and innovation. If we fire some employees and don't build new data-centres, it leads to noticeable multiplier effect on margin. The time will show how long lasting this model is.

Anyway, Google is in very good position in the market. After introducing the AdSense service to blogs (such as and, the company aims for new acquisitions to develop such services as online book-selling and gmail, to improve Chrome OS and to come to smartphones market with its Android mobile OS.

Peace PRize for Storytelling

            Obama's "extraordinary efforts to strengthen international diplomacy and co-operation between peoples" won the Nobel prize 2009.

This week taught me the fast track to get the prestigious prize: be a president and make promises. The last doesn't have to be fulfilled, by the way. I found it quite surprising due to my strong belief that a Nobel prize is given for the deeds, not the intentions. That's why let me recall what the newborn peacemaker claimed to do for the sake of peace in the world:
  • Published an order to close the military prison at Guantanamo Bay, but has not approved any plans to actually do so
  • Oversaw a decrease in US troops in Iraq, onlt to replace them with private mercenaries
  • Expanded the war in Afghanistan into Pakistan (by increasing the number of air attacks in its border regions)
  • Increased the number of US troops in Afghanistan by tens of thousands, with many more on the way
  • Established a US military presence on Colombian military bases
  • Refused to lend even the most superficial support to the political opposition in Iran, even as the regime there publicly executed dissidents
  • Stood idly by as police and National Guard troops engaged in one of the most vicious crackdowns against free-speech in recent memory while attending the G20 summit in Pittsburgh, PA
and the list can be continued... But is it what the Nobel committee called the "new climate in international politics"? Obviously, "dialog and negotiations are preferred as instruments for resolving even the most difficult international conflicts", but is it the real state of affairs? I was about to get disappointed with the silent Guardian, when i came across its journalist's dismaying article. He was shocked "to think that a president carrying on two wars would be given a peace prize" and straightly suggested "the Nobel peace committee should retire, and turn over its huge funds to some international peace organization ... which has some understanding of history", because a peace prize should be given "not on the basis of promises...., but on the basis of actual accomplishments towards ending war".

I was really surprised with such an open resentment, and opened The Economist that highlighted this topic as well. However, the authors were more distant and held back from adverse criticism. They rose the question of  the prize's "maturity" that sounded disturbed, but not indignant. Counting the major achievements of the US President, the authors didn't forget about the controversial side. They give reasons for critics' complaints and it seems that the material is rather neutral. But let me point out one significant thing. The article starts with a question - "Is it premature to give Barack Obama the Nobel peace prize, less than a year into his presidency?". It is obvious that the writers would try to give the answer, but in a veiled way. That's why i made a point of the last sentence that not only contains the word "infuriated", but actually ends with the words "at least". Apparently, this is the answer.

The BBC news suspended judgement and shuffled off the burden on other people's opinion. At first they gave the whole citation of the Committee's decision, and then printed the arguments against it and the world reactions.

Expectedly, The Daily Mail was quite vivid and straightforward starting with the title. What strikes the reader's eye immediately is that Mr. Obama "had not even known he was among the record 205 nominations". But then the story grasps even more amazement - "The deadline for submitting candidates had come just 12 days after he entered the White House". Then the reader is taken to the detailed guided tour   over the previous similar prize winners. The authors cite politicians and conjecture what the President achieved so far. Be prepared that all the negative sides will be highlighted twice and enjoy your Saturday afternoon absorbing the details.

Finally i looked through the titles of my home newspapers. They were seething with sarcasm - "Committee on Nobel advances and curtseys", "Obama gets his prize in advance", "Award Without A Year", etc.

To sum it all up and make some conclusions, i'll just tell you a joke that appeared in Russia soon afterwards:

In 1990 President Gorbachev won the Nobel prize.
In 1991 the USSR collapsed.
In 2009 President Obama won the Nobel prize.
Hmm... Let's see what'll happen in a year!

Jobs Hit The Global Markets

        The new quarter started with a serious retreat of the world markets due to disappointing jobs report issued this Friday.

The American markets met October with a serious decrease. The S&P 500 dropped 2,1 per cent lower, Dow Jones was down 1.6 per cent - the biggest weekly drop since July. The Nasdaq is also 1.6 per cent lower.

As trading opened in Europe, Britain's FTSE-100 lost 0.6 percent, Germany's DAX declined 0.7 percent and France's CAC-40 swooned 1.1 percent.

Japan's Nikkei 225 average dropped 2.5 percent, Hong Kong's Hang Seng lost 2.8 percent, Taiwan's index shed 1.8 percent, Australia's market lost 2.1 percent and Indonesia's benchmark was down 0.2 percent.

However, the most noticeable lowering happened on the Russian markets. RTS and MICEX met the news with a 4,4-5,5% drop - the most remarkable fall from the end of June. The analysts suppose that it is only the beginning due to the worldwide indecis correction that is going to deepen when the Q3 financial statements of the american companies will be published.

The data from the official job report issued this Friday turned out to be a cold shower for the investors. It ruined most of analytical forecasts. The unemployment rate of 9.8 percent (maximum for the past 26 years) was not a surprise, but the decrease of jobs was remarkably higher than expected - the loss of 263,000 jobs against 175,000 forecast. The information made it clear the recovery is going much slower than expected.

I scanned through several papers, but all of them were pretty objective. However, the Russian newspapers were a bit more worried about the forthcoming tendencies on the markets.

The Smart Money article gave the dry figures of the past events on the global markets, and mentioned the expected indecis correction in Russian sector due to the "long ignorance of external negative effects".

The Kommersant newspaper used a very promising title "Correction meets globalization" and pointed out the growth  opportunities for the Russian markets. This piece turned to be my favourite due to concise narration and a few remarkable noted from the analysts. It also drafted a slight future forecast, however, without any advice to the traders.

The Financial Times summed up the market events for the week still emphasizing on the doubts raised by the jobs report, though inspiring it readers with the news from the technology sector.
However, the Times Online article was a bit "spooky" and "cast a shadow" on expectations about the recovery of the US economy. But, anyway, the authors tried to keep neutral, and equalled the bad news with some information on financial advantaged that were gained during this week by Man Group, Legal&General, Deutsche Bank and Smiths Group.

Mail Online didn't miss out the recent market decline as well. But, unlike other newspapers, the title was really optimistic - "Record quarter for the Footsie with best ever three-month rise". The authors amazed me with their skill of contradiction. They started with the most assuring "down, but certainly not out" to make a little historical overview and conclude the "stunning return" from March. The article is written in very vivid language that makes you read it to the very end following the "mouth-watring situations" and "fun and games" in various industries.

To resume it all, i want to say that it is hard to forecast the further market behavior basing only on the facts stated above. Apparently, the markets will try to recover losses on Monday morning, but back on topic I would definitely recommend you to read Kommersant, Mail Online and, of course, follow the immediate data on stock exchanges where all the rises and drops can be traced directly.