The OFT has announced that it is considering looking into the UK airports market with a view to establishing if the current market structure works well for consumers.At present BAA own and operate airports which handled 63 per cent of air passengers beginning or ending their journey in the UK in 2005.
Within the London area, this figure rises to 92 per cent of all air passengers and within Scotland to 86 per cent of all air passengers.
The OFT has a public duty to keep markets under review and routinely reviews the economy to identify markets that may not work well for consumers that would be possible candidates for market studies, which in turn could lead to possible referral to the Competition Commission.
One of the possible candidates being considered relates to the structure of UK airport markets.
In the context of the current bid offer for BAA and the European Commission’s clearance yesterday of the proposed takeover, it would be inappropriate for OFT to consider this issue further at this time without making public that the structure of the market may be reviewed. OFT plans to make a detailed announcement by the end of June on the scope of any review in this area.
OFT Chief Executive John Fingleton said:
“OFT constantly looks proactively at whether markets work well for consumers. BAA currently owns and operates airports which handle 63 per cent or air passengers beginning or ending their journeys in the UK, with 86 per cent of passenger journeys in Scotland undertaken through Scottish airports operated by BAA. Competition in the air transport is an extremely important part of the UK economy, with a significant impact on UK consumers and business alike. For these and other reasons, we have decided to look more closely at how the airport markets work with the aim of establishing whether the current market structure delivers best value for air travellers.”
UK airports are important to the UK economy - BAA latest turnover figures for UK airports are £1.7bn for 2005/6 - higher than the previous years’ figures of £1.64bn. Its profits for the last reporting period were £660m.