BAA monopoly to be broken up

19th Mar 2009

The UK’s airports are set for a radical shake-up after the Competition Commission confirmed BAA must sell Gatwick and Stansted airports, along with either Glasgow or Edinburgh.

The long-anticipated decision aims to the improve the customer flying experience as well as remove BAA’s monopoly over Britain’s busiest airports.
Following a two-year study, the regulator concluded: “Given the nature and scale of the competition problems we have found, we do not consider that alternative measures, such as the sale of only one of the London airports or greater regulation, will suffice.”

The move is being welcomed by airlines and passengers.

Andy Harrison, easyJet Chief Executive, said: “The Competition Commission has completed an excellent body of work of the sort that has been sorely lacking over the years in the industry. It has demonstrated regulatory gaming by BAA allied with profound weaknesses in how our airports are regulated. The break-up of BAA has been the inevitable outcome of these failures, but break-up alone will not resolve the problems of individual monopoly airports.”
However BAA could yet appeal against the ruling. Colin Matthews, BAA chief executive, said the company would make a decision within the next two months. “We might have to appeal if we reach the conclusion that it is simply not practical to proceed,” he said. “It is not just a question of whether we agree or not with the Competition Commissioner’s analysis, it is also a question of the practicalities of selling three airports in the current, extraordinarily tough conditions.”
Its sale of Gatwick is already underway, but analysts estimate that BAA is unlikely to get the £2bn it hoped for the airport because due to the financial crisis that has crippled debt market.

BAA was dealt a further blow with the Competition Commission also ruling that the Civil Aviation Authority take further control to improve customer service at Heathrow.



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