Move Opens Up Market, Provides Incentives For Better
Service
Britain's Competition Commission
(CC) has spoken... and this week, issued a provisional ruling that,
if confirmed, would require BAA to sell three of the seven airports
it now operates -- Gatwick, Stansted, and Edinburgh.
The CC's ruling also proposes measures to ensure that investment
and levels of service at Heathrow, and possibly Gatwick and
Stansted, meet more effectively the needs of airlines, passengers
and other airport users. At Aberdeen airport, it is proposing
measures to promote investment linked to rebates on charges.
"Having provisionally identified competition problems at each of
BAA's seven airports, we are proposing remedies which address them
directly and comprehensively through a combination of divestment
and other measures to improve investment and levels of service,"
said Christopher Clarke, Chairman of the BAA Airports inquiry. "The
most effective way to introduce competition in the South-East and
in lowland Scotland is to require the three London airports and the
two principal Scottish airports to be separately owned. Hence we
are proposing the sale of Gatwick, Stansted and Edinburgh airports
to new independent owners with the operating capabilities and
financial resources to develop each of them as effective
competitors.
"Under the common ownership of BAA, there is no competition," he
added. "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."
The CC had earlier "recommended" BAA sell off at least two of
its airports. Selling the airports may not only provide new service
incentives for passengers to enjoy... but the revenue may also help
BAA owner Grupo Ferrovial recoup some of the reportedly massive
losses it has incurred since the Spanish concern bought the British
airport operator in 2006.
As ANN reported, BAA announced in September it
would sell off Gatwick.
The CC adds it also intends to make recommendations to the
Government on a more effective, and ultimately more flexible,
system of airport regulation and also on aspects of government
airports policy.
Next, the Competition Commission will consider responses to its
provisional decision document. It expects to publish its final
report on BAA's seven UK airports, and the appropriate remedies, in
late February or early March 2009.