The bidding for Gatwick airport is expected to be a two-horse race as rival consortiums have struggled to raise financing.

Hochtief AirPort, a division of the German engineering firm, and Citigate Infrastructure, a consortium that includes the Citigroup bank, are almost certain to be in the running for the £2 billion airport but sources close to the deal have revealed that other interested parties are not in a position to make a bid. These include the proposed consortium that was to have been led by Virgin Atlantic and easyJet.

The two airlines had hoped to attract financial backers into a standalone consortium but are understood to be seeking an alliance with one of the other bidders.

A spokesman for Virgin Atlantic said: “We are now focused on offering our experience and help to one of the other bidders. We are not looking to put our own money into this but we have valuable customer experience — and that is what the new owners of Gatwick will need.”

Manchester Airports Group is also thought to be trying to raise financing but it is understood not to have done so yet.

Calpers, the California Public Employees’ Retirement System, and Calsters, the California State Teachers’ Retirement System, have held talks with a number of possible partners but are both thought to have walked away.

The Citigate consortium is made up of Citigroup, Vancouver Airports and John Hancock, the US financial institution. The group bought Chicago’s Midway airport for $2.5 billion (£1.7 billion) this year.

Hochtief AirPort has shareholdings in Athens, Budapest, Düsseldorf, Hamburg, Sydney and Tirana airports and its Gatwick bid is expected to be given backing by the parent company’s finance arm.

Early bids are expected to be submitted in January but if only two consortiums are involved Gatwick may struggle to command an attractive price.

BAA, the airports operator that owns Gatwick, had hoped to raise between £2 billion and £2.5 billion from the sale of the London airport, but analysts believe that it is unlikely to make more than £1.8 billion.

Ferrovial, the Spanish infrastructure company, bought BAA in 2006 for £10.5 billion but has since struggled to refinance the debt it took on and has been divesting non-core units such as World Duty Free to reduce its debt mountain.

BAA began the auction for Gatwick earlier this year partly to reduce the group’s debt but also to pre-empt a sale order from the Competition Commission. The commission is investigating BAA’s monopoly ownership of London’s three main airports — Heathrow, Gatwick and Stansted — and its preliminary report found that ownership of all three was bad for consumers. It wants BAA to sell both Gatwick and Stansted.

BAA is understood to be fighting to retain Stansted but has appointed HSBC and RBS to find buyers for Gatwick.

“The men and boys will be separated in a few weeks when we find out who really has the money and the ability to do this deal,” said a source close to the negotiations.

“Initially there were lots of expressions of interest but we expect the number to drop dramatically probably to just two when we start talking money.”

So far, the potential bidders have received little information from BAA about Gatwick’s finances and the bidding process.

In addition, a number of the potential bidders have expressed concern that any interference by the Competition Commission could delay the sale process until late next year. It has been widely reported that BAA would be disappointed if the deal is not closed by the summer.

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