BAA airport ownership criticisedIt may be failing airlines and consumers - report

22 April 2008

Airport sign directing travellers to the terminal.

A new report has said that BAA's ownership of seven UK airports, including Heathrow and Gatwick, ‘may not be serving well the interests of either airlines or passengers’.

The Competition Commission’s view came in an ‘emerging thinking’ document ahead of its provisional and then final report into BAA and UK airports.

Both BAA and British Airways have come under fire for the shambolic opening of Heathrow's Terminal 5.

Airport sale

The Competition Commission said no conclusions had been reached at this stage but that it expected to publish its provisional findings in August.

It added that ‘if competition problems are identified, it intends to set out its possible remedies at the same time, whether requiring the sale of one or more of BAA's airports or otherwise’.

It has been suggested that Spanish-owned BAA could sell Gatwick Airport. Its other UK airports are Stansted, Southampton, Edinburgh, Glasgow and Aberdeen.

Runway capacity

Christopher Clarke, who is chairing the CC's BAA inquiry, said: ‘BAA dominates the airports markets in the south east of England and in lowland Scotland, both areas of high economic activity and importance.

‘Currently, there is no competition between BAA's three London airports (Heathrow, Gatwick and Stansted) and only very limited competition from non-BAA airports (including London City and Luton).

‘Similarly, there is no competition between their two airports in lowland Scotland (Edinburgh and Glasgow) although Glasgow does face competition from one non-BAA airport (Prestwick).

‘One of the principal reasons for structuring the privatised BAA in 1987 to include all three major London airports was to provide adequate airport capacity in the south east of England.

‘Currently there is a shortage of capacity, notably runway capacity, to meet current and expected future demand.

‘Even if the proposed expansion at both Stansted and Heathrow goes ahead within the expected timescales, this shortage will remain until at least 2015 and probably longer as a new runway at Heathrow could not be built until 2020.’

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