AIG last week sold its 50% stake in London City airport as it finalised plans to offload further assets in order to repay the $US85 billion ($109 billion) US Federal Government rescue package.

Global Infrastructure Partners (GIP) has stepped in to buy AIG’s stake in the business after the company partnered AIG in the initial acquisition of the niche business airport two years ago.

Though terms of the deal were not disclosed, reports suggest AIG could book a loss of up to £125 million ($287 million) on the deal.