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BAA forced to sell Stansted, Gatwick and Edinburgh

BAA looks odds on to be forced to sell two of its three London airport following a Competition Commission report released today.

The CC confirmed that the Spanish-owned operator must sell Gatwick and Stansted, as well as Edinburgh Airport, although the decision is subject to a final consultation within the next few weeks, with a final report due in early March 2009.The directive would reduce BAA’s London interests to just Heathrow, where the CC has also stated the airport operator must improve standards for airlines and passengers.
Christopher Clarke, chairman of the CC inquiry into BAA airports, said separate ownership of the three main London airports and the two main Scottish ones was the most effective way to introduce competition in south east England and Scotland.
He said: “Under the common ownership of BAA, there is no competition. Under separate ownership, the airport operators, including BAA, will have a much greater incentive to be far more responsive to their customers, both airlines and passengers.”
At Aberdeen, the CC said today that it was proposing measures to encourage investment linked to rebates on charges.
The CC said the Department for Transport should “give consideration to the ambitions of the new owner of Gatwick Airport, including the possibility of a second runway after 2019”.
The CC will now consider responses to its provisional decision document published today. It expects to publish its final report on BAA’s seven UK airports, and the appropriate remedies, in late February or early March 2009.
BAA chief executive Colin Matthews said to the Press Association: “As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity.
“In Scotland, the commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership, and we believe there is no justification for specifying which of these airports should be sold. We will continue to make our case to the CC.”
He added: “We recognise that current capacity constraints in the South East will limit the pace of development of competition. Even in the short term, however, we expect benefits from different approaches to airport management as well as greater initiative in longer-term planning and development of new investment which will be critical to sustained effective competition.
“We will also be making recommendations to the Government on a more effective, and ultimately more flexible, system of airport regulation as part of the Department for Transport’s current review. However, we recognise that any significant changes to the current system of regulation will take time and will require legislation.
“We therefore propose to introduce more immediate measures, as soon as possible after we publish our final report early next year, to ensure that at Heathrow, and possibly at Gatwick and Stansted, there is continued and improved focus on the needs of airlines and passengers in terms of investment and the level and quality of service.”

The industry has been largely receptive towards the sell-off.

Francesca Ecsery, General Manager of said, “Operational improvements to Gatwick would encourage more consumers to use the airport more and firmly establish it as a major international hub instead of just Heathrow’s little brother. Stansted’s expansion plans will certainly entice companies to bid on the airport, however the new owner must improve relationships between the airport and airlines to make Stansted more successful. As Scotland’s largest airport, Edinburgh will appeal to a number of buyers.

She added: “Air travel is seen as an essential part of life - whether it be business or leisure. A journey begins and ends at the airport and it’s not enough to offer shops to travellers; they should be presented with hassle-free check-in procedures, efficient security screening and careful handling of their baggage.”