Competition watchdog urged airports sale

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The question of BAA's ownership of seven British airports first arose in April this year with the publication of a report which said that BAA "may not be serving well the interests of either airlines or passengers".

The Competition Commission proposed in a preliminary report that BAA divest itself of two of its three London airports.

The competition watchdog made it clear that it was unlikely to require Heathrow to be sold, which left Gatwick and Stansted on the sale block.

It also recommended that Spanish-owned BAA lose control of either Edinburgh or Glasgow Airport, but a final report is not due until the end of the year.

Reports have speculated that Gatwick could fetch more than £2 billion.

Earlier this month, Sir Richard Branson's airline, Virgin Atlantic, confirmed its interest in bidding for Gatwick Airport as part of a consortium.

Christopher Clarke, who was chairing the Competition Commission's BAA inquiry, said in April: "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."