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The Competition Commission has decided that BAA should sell Gatwick, Stansted and Edinburgh airports in its provisional proposals. The watchdog said the move was necessary to improve levels of service at UK airports. But the airports authority said it did not believe there was enough evidence to support the decision to force a sale of Stansted or Edinburgh.
BAA chief executive Colin Matthews said: “As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity. “In Scotland, the Commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership, and we believe there is no justification for specifying which of these airports should be sold. “We will continue to make our case to the Competition Commission.”
The Competition Commission is also planning to impose measures to make sure service and investment at Heathrow meets the needs of both airlines and passengers. "Under separate ownership, the airport operators including BAA, will have a much greater incentive to be far more responsive to their customers, both airlines and passengers," it said. BAA has already put Gatwick up for sale following the Competition Commission’s initial report in August. Virgin Atlantic is preparing a bid for Gatwick as part of a consortium, and other potential bidders include Australia-based Macquarie, Germany’s Fraport, and the owners of Manchester airport.
The Competition Commission’s proposals will now go out to consultation before it publishes its final report in late February or early March.
BAA, which runs seven airports in the UK, was bought by Spanish firm Ferrovial for more than £10 billion two years ago. EasyJet chief executive Andy Harrison said the Competition Commission’s remedies only address part of the problem. "The simple fact is that airports like Gatwick are a monopoly and simply changing the ownership will not change that fact," he said. "On the contrary, any new owner of Gatwick will have to pay a full price and will have every incentive to exploit the weaknesses of UK airport regulation with air passengers having to pick up the bill yet again.
“Until there is dramatically more airport capacity in the South East, each of the BAA airports will continue to operate as local monopolies and monopolies rarely act in the interests of their customers. "EasyJet agrees with the CC that there is a pressing need for more airport capacity in the South East of England but until there is enough capacity for the market to operate freely, the CC’s hopes that price regulation could eventually be removed at Gatwick is always going to be thwarted by a monopolist owner.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
