BAA is struggling to get higher offers for its second largest UK airport Gatwick. Three rival consortia are expected to make bids on Monday, but the offers ale likely to be far below the UK airport operator’s earlier expectations.

Analysts are saying that these bids could be anywhere between £1.4bn and £1.5bn, well below £1.8bn, initially expected by BAA, a subsidiary of Ferrovial, Spain.

The valuation of Gatwick airport has gone down due to deterioration in operating performance, as passenger traffic has fallen sharply in last 6 months.

The bidders are also forced to increase equity levels in their bids since raising bank debts has become quite difficult. Debt levels are required to be restricted in order to get better investment-grade ratings from agencies.

The potential buyers of Gatwick are discouraged by the embarrassing collapse of Chicago Midway airport’s privatisation deal in the US. One of the expected bidders for Gatwick admitted that it failed to get finance to complete the deal which it had won for Chicago Midway in September.

Three groups bidding for Gatwick, include Manchester Airport Group, comprising of Borealis, Canadian Infrastructure Fund and the Greater Manchester Pension Fund; Lysander Gatwick Investment and Global Infrastructure Partners.