BAA may be forced to sell off airports

22-04-2008

BAA may be forced to sell off airports
The Competition Commission (CC) is considering forcing BAA to sell off some of its airports in a bid to shake up the industry.

The market regulator said in its interim report that BAA's ownership of seven airports in the UK – including the three major London airports, Heathrow, Gatwick and Stansted - may not be serving the interests of either airlines or passengers.

Provisional findings are expected to be published in August, when the CC will also outline possible solutions, which may include the sale of one or more of BAA's airports, the watchdog added.

Chairman of the BAA airports inquiry Christopher Clarke said: "BAA dominates the airports markets in the south-east of England and in lowland Scotland, both areas of high economic activity and importance.

"We are particularly concerned by its apparent lack of responsiveness to the differing needs of its airline customers, and hence passengers, and the consequences for the levels, quality, scope, location and timing of investment and levels and quality of service."

According to the CC, the reason for allowing BAA to run all three major London airports when the company was privatised in 1987 was to provide adequate airport capacity for the south-east of England.

BAA has argued that competition cannot develop between BAA's London airports until the problem of capacity shortage has been resolved.

However, the report questions whether it is the lack of competition between the airports that is causing the capacity shortage.

BAA, which is owned by Spanish firm Ferrovial, has been under fire recently for its own part in the disastrous opening of Heathrow Terminal 5.

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