“Great news - but why did it take so long?” That is easyJet’s response to today’s news that the Office of Fair Trading is to begin an investigation into the UK’s airports market.The UK was one of the first countries in Europe to recognise the consumer benefits of freeing airports from government control and establishing a competitive framework in which they operate.
While this has given UK airlines and consumers some great airports - there are too many cases where the ownership or regulatory structures act against consumers. The OFT investigation is long overdue.
easyJet serves 12 UK airports, carries more passengers within Europe than any other UK airline and uses 6 out of the 7 BAA airports in the UK. In this industry-leading position the airline looks forward to playing a pivotal role in the OFT’s market study.
The OFT has a number of major issues to consider:
Does the BAA’s ownership of over 90% of the London airport capacity act in the public interest?
Does the BAA’s ownership of Glasgow, Edinburgh and Aberdeen act in the public interest?
What lessons can be learnt from the competition that exists between closely-located airports such as Liverpool and Manchester; or Nottingham East Midlands and Birmingham; or Teesside and Newcastle?
Is BAA’s application of unitary pricing between different terminals at Gatwick and Heathrow compatible with European law? For example, easyJet’s facilities at Gatwick’s South Terminal are markedly inferior to those that BA enjoys at the North Terminal - yet BAA charges exactly the same on a per-passenger basis.
Does the current regulatory regime, which guarantees a 7.75% return for BAA on all capital expenditure lead to the over-specification, or “gold-plating”, of airport facilities?
The OFT will have its work cut out but this investigation is welcomed and easyJet looks forward to this long-anticipated opportunity to ensure that the UK’s airports give better value to the travelling public.