The International Air Transport Association has welcomed the U.K. Competition Commission’s emerging thinking on the BAA Airports market investigation. The Competition Commission noted that the ownership of seven U.K. airports is not in the best interests of passengers and that the system of economic regulation applied by the CAA may adversely affect competition.
“The Competition Commission has come to the same conclusion that every passenger using the U.K.‘s main airports knows all too well: there is a problem with the U.K. airports that must be fixed urgently,” said Giovanni Bisignani, IATA Director General and CEO.
“London, where BAA owns the three major airports, is the most critical area. It is perverse that BAA’s profits rise as service levels fall. Breaking up BAA to introduce some competition is a step in the direction of a solution,” said Bisignani.
IATA also highlighted the need to review the current system of economic regulation. “Allowing an 86% increase in Heathrow charges over the next five years - on top of a 50% increase over the last five years - is a very bad joke. Only an out-of-control monopoly could plan their business in such terms. In short, the CAA’s system of economic regulation is not fit for purpose,” said Bisignani.
“The problem is serious and half-measures won’t help. We need a complete overhaul of the CAA economic regulation to focus it on delivering excellent infrastructure for passengers - not excessive profits for the BAA.”