BAA forced to sell Stansted Airport

BAA forced to sell Stansted Airport

The Competition Commission (CC) has confirmed BAA will be forced to sell Stansted Airport and either Edinburgh or Glasgow Airport.

The decision confirms the CC’s earlier provisional view, which was published in March.

The sales process will start in three months’ time — or sooner if undertakings are accepted from BAA in the meantime.

BAA declared itself “dismayed” at the long-expected decision.

BAA chief executive, Colin Matthews, said: “We are dismayed the CC’s final decision still requires BAA to sell Stansted and either Glasgow or Edinburgh airport.

“The Competition Commission has not recognised that the world and BAA have changed.

“This decision would damage our company which is investing strongly in UK jobs and growth.

Matthews added BAA will now consider a judicial review of the decision.

Competition Commission

The CC has been considering whether there have been any material changes in circumstances since it published its final report on BAA in March 2009 that should give it cause to reconsider the implementation of the airport sales1Court of Appeal required by that original decision.

The decision was subject to a legal challenge by BAA, which eventually culminated in the reinstating the CC’s findings in October 2010.

In February, the Supreme Court refused BAA permission to appeal further.

The CC has concluded that the sale of the airports is fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate owner-ship, despite the current Government’s decision to rule out new runways at any of the London airports.

Chairman of the CC BAA remedies implementation Group, Peter Freeman, said: “We hope the sales can now proceed without delay so that passengers and airlines can start to enjoy the benefits of greater competition.

“Our report has been challenged, reviewed and upheld and it is clear that the original decision to require BAA to divest three airports remains the right one for customers.

“It has been a long process while BAA has challenged the decision—quite understandably given its significance.

“However, both we and the courts have now exhaustively re-examined the case for the sales and found it to be sound so there are no grounds for delaying further.”

BAA

However, BAA argues it has changed since the Competition Commission’s March 2009 decision.

BAA’s owners have invested £5 billion in UK airports since acquiring the company in 2006 (including over £300 million at Stansted), and are currently investing a further £1 billion a year.

BAA also argues its operational performance has improved: security queues are shorter; baggage delivery is more reliable; and flight punctuality has hit record levels.

However, neither addresses the concerns raised by BAA’s virtually monopolistic position in the south of England and, particularly, Scotland – the original CC concern.

Again, BAA argues its airports face increased competition from non-BAA airports, particularly those in Europe, for the business of low cost carriers who now take a pan-European view of the market.

“It is also clearer now than it has ever been that Heathrow and Stansted serve different markets,” argued BAA.

The full CC report can be seen here.