BAA to sell Gatwick

17-09-2008

BAA to sell Gatwick
BAA is to sell Gatwick airport after the Competition Commission warned it could force the group to break up.

The airport operator said it took the decision to sell Gatwick to resolve current uncertainty, although the company disagrees with the Competition Commission's findings.

Last month, the competition watchdog recommended BAA sell two of its London bases and one of its Scottish airports.

Colin Matthews, BAA's chief executive, said: "Gatwick has long been an important and valuable part of BAA and the decision to sell was not taken lightly. We believe that the airport's customers, staff and business will benefit from the earliest possible resolution of current uncertainty.

"When the Competition Commission published its provisional findings, we said that we would be realistic in our response, though we disagree with the Commission's report and the analysis on which it is founded."

The government originally believed a single operator of London's major airports Heathrow, Gatwick and Stansted would be beneficial in driving forward expansion but recently the Competition Commission has expressed concerns that a lack of competition may be harming both customers and airlines.

In a report published a few months ago, the Commission said it was considering a forced sale of Gatwick and Stansted to boost competition and improve standards.

Budget airline Ryanair dismissed the sale as a "trick" to distract attention from the fact that the Competition Commission wanted two airports to be sold.

Ryanair's head Michael O'Leary said: "Ryanair calls on the Competition Commission and the UK Government to take early steps to force the early sale of Stansted and at least one of the Scottish airports, so that real competition can be introduced in time for summer 2009, and the BAA airport monopoly (which has finally been exposed by the Competition Commission as being bad for consumers and bad for competition) - can at last be broken up."

Trade union Unite also criticised the move. Unite national officer, Steve Turner, said: "At a time when the sector is being battered by the credit crunch, faces tough challenges in soaring fuel prices and new security measures, aviation needs stability, not the fire sale of a profitable, significant airport.

"This is yet another failure of regulation but Unite will not stand by while workers pay the price with their jobs and passengers see services cut."

Richard Branson has already expressed interest in buying Gatwick as part of a consortium with other airlines. Other buyers including the owners of Manchester airport and investment group Macquarie have also been touted as potential buyers.

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