OFT launches airports probeWatchdog wants to know how well sector works

30 June 2006

The Office of Fair Trading (OFT) has launched an investigation into the UK airports sector to see if it works well for consumers.

The study could lead to possible referral to the Competition Commission.

The OFT first warned in May that it was considering whether to carry out an investigation.

Today it pointed to BAA, the UK's main airports operator, and said: 'Nearly two-thirds of UK air passengers begin or end their journey at BAA's airports. Within the London area this rises to nine out of ten passengers, and in Scotland over eight out of ten air passengers fly from a BAA airport.'

BAA - which Spanish firm Ferrovial recently bought for GBP 10.3 billion - operates Heathrow, Gatwick, Stansted, Southampton, Aberdeen, Glasgow and Edinburgh.

Wider choice

OFT chief executive John Fingleton said: 'Greater competition between airlines over the past decade has led to wider choice for air travellers and lower fares.

'We now think it is time to explore the potential for greater competition within the airport industry as this could ultimately yield significant benefits in terms of timely and adequate investment in UK airports, a better value service to the UK travelling public as well as potentially relieving the industry - and ultimately its customers - of the costs of regulation that may be disproportionate.'

Low-cost airlines have lobbied for an investigation and when the OFT raised the prospect of a review in May it was welcomed by Ryanair and easyJet.

At the time, Ryanair chief executive Michael O'Leary said the only way to improve the service for passengers was 'to break up the BAA monopoly of airports and force them to compete against each other.'

Overwhelming evidence

And easyJet planning director Andrew Barker said his company would submit 'overwhelming evidence' showing that BAA was not acting in the interests of the travelling public.

BAA pointed out that its businesses were already price-regulated by the Civil Aviation Authority and the Competition Commission.