The Stansted Airline Consultative Committee has
welcomed the UK’s Office of Fair Trading’s referral of the BAA monopoly to the
Competition Commission to investigate a number of competition concerns. The
OFT noted that it had received over 60 responses to its Study on the UK Airports
Market, including a detailed submission from the Stansted ACC.  In its submission,
the Stansted ACC raised a number of serious abuses by BAA Stansted of its monopoly
power that warranted further investigation by the CC.

The principle example of the BAA’s abusive conduct was BAA’s attempt to spend £4
billion on a second runway and terminal in Stansted, a development that should cost
about a third of this amount and which involves an excessive land grab.  Stansted
users are unanimously opposed to this wasteful level of expenditure, the purpose of
which is to almost triple airport charges in Stansted.

 

Welcoming the OFT’s decision today, David O’Brien, Chairman of the Stansted ACC, said:

 

“Despite the recent change in ownership, BAA is progressing with plans to spend in
excess of £4 billion to expand capacity of Stansted Airport.  Although Stansted
users unanimously support the expansion of the airport, BAA is using this
opportunity to waste £ billions on gold plated facilities in order to hike up its
airport charges to airlines and consumers.  This will result in airport charges
being almost tripled, which in turn will lead to higher air fares for UK consumers.
The Stansted ACC has put forward alternative proposals, which would cater for the
growth of the airport while keeping costs to consumers low and saving over 800 acres
of Essex countryside.  BAA has consistently refused to consider lower cost
alternatives for this development and have ignored the requests of their airline
users. 

 

The BAA’s monopoly over the three main airports in London is clearly
anti-competitive and this is the reason why these airports are regulated by the CAA.
However, this regulation has been ineffective.  It has failed to prevent BAA from
developing expensive, inefficient facilities, which do not meet the requirements of
users, in order to inflate airport charges through the regulatory process. 

 

Stansted ACC’s submission to the OFT detailed the abject failure of BAA to consult
with users on their requirements.  It also highlighted the fact that the BAA wastes
£ millions on consultants and then expects the travelling public to pay for them.
BAA has confirmed that it has spent over £40 million on consultants to develop plans
for their £4 billion second runway and yet claims that there are no written reports
by these consultants.  This alone warrants a public enquiry.

 

We hope that the CC will now force the BAA to properly consult with airline users
and provide low cost, efficient facilities that meet the requirements of users.  The
Stansted ACC will work with the CC in its investigation of the ongoing abuses by BAA
in Stansted.”

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