bmi urges BAA monopoly review

9th Feb 2007

bmi has told the UK’s Office of Fair
Trading that the monopoly ownership by BAA of Britain’s busiest
airports must come to an end.The bmi group supports many of the
findings and provisional conclusions set out in the OFT’s BAA airport
market study paper. The OFT’s paper highlighted key issues and problems
inherent with BAA’s monopoly provision of airport services.

Nigel Turner, chief executive officer of the bmi group, said: “We
welcome the opportunity to make our views known to the Office of Fair
Trading about a referral to the Competition Commission of the supply of
airport services by BAA within the United Kingdom. We agree that the
current BAA joint ownership of airports in the South East (Heathrow,
Gatwick and Stansted) and in Scotland (Edinburgh and Glasgow) does
prevent, restrict and distort competition. The current regulatory regime
in the guise of the CAA’s price control quinquennial reviews also
contributes to that distortion of competition.

“We strongly advocate the break up of the BAA monopoly both in the South
East and in Scotland and urge the OFT to refer the supply of airport
services by BAA to the Competition Commission for further in-depth
investigation. In our opinion, this is the only course of action that
will remedy the current anti-competitive situation.

“Airlines have had to embrace competition for years, yet our major
airports have been protected from it for far too long. This has led to
inefficiency, inconsistency of service and inflation-busting price
rises. The BAA monopoly must be dismantled as the current regime is
inhibiting real intra-airport competition in the UK.

“The UK aviation industry has always prided itself on being at the
forefront of innovation and promoting vigorous competition, but if this
initiative is not taken now the future outlook for consumers, the
industry and the wider UK economy will be bleak. bmi believes there is a
very strong consumer case to warrant remedial relief by the Competition
Commission following any investigation it may conduct to create greater
competition between UK airports, particularly those London and Scottish
airports owned by BAA”



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