BAA wins part of appeal against airport sale ruling

Airport operator BAA today won part of its appeal against a Competition Commission (CC) ruling that it must sell three of its airports.

The Competition Appeal Tribunal (CAT) today concluded "with the greatest reluctance" that a claim by BAA of "apparent bias" in the CC decision was successful.

However, BAA's appeal on the grounds that the CC had not properly taken into account the effects the recession would have on the sale of the airports failed today.

BAA had challenged the legality of the CC decision to make it sell Gatwick and Stansted airports as well as one of either Glasgow or Edinburgh airports.

BAA had put forward a case of "apparent bias" saying that Professor Peter Mozier, one of the CC airports' inquiry panel had "a powerful connection" to the Manchester Airport Group which had been interested in buying Gatwick.

When the appeal was heard in October the appeal panel was told that Professor Mozier's presence meant that the inquiry was "riven through with an acute and intolerable conflict of interests."

Giving his ruling today the appeal tribunal's president Mr Justice Barling said that the apparent bias appeal had succeeded and that it was the unanimous decision of the of the three-strong panel.

He said: "We have reached our conclusions on Ground 1 (the apparent bias) with the greatest reluctance.

"Our conclusion is not that Professor Mozier... was actually biased but that a fair-minded person would have concluded that there was a real possibility of bias."

BAA's second grounds for appeal was entitled "Proportionality" and this referred to what BAA considered was far too short a time, given the economic climate, to dispose of its airports.

The appeal tribunal said that its unanimous decision that the challenge based on Ground 2 (the proportionality) failed.

Spanish-owned BAA had already decided to sell Gatwick even before the CC ruling on its airports made earlier this year.

In October it was announced that Gatwick was being sold for £1.51billion to US-based investment fund Global Infrastructure Partners, which already runs London City Airport and which officially took over at Gatwick earlier this month.

The appeal tribunal panel said today it proposed to allow further argument now in relation to the apparent bias ruling "unless the parties can reach agreement on it".

It is now expected that BAA and the CC will put forward further evidence to the tribunal.

A CC spokesman said after today's ruling: "We will be studying the judgment and its implications carefully."

A BAA spokesperson said: "We are pleased that the CAT upheld our appeal on the grounds of apparent bias.

"Further discussions should now take place with the Competition Commission, as the CAT suggests, to determine the appropriate response to this judgment."

Liberal Democrat transport spokesman Norman Baker MP said: "This is bad news for passengers. They are the ones who suffer when one company has a stranglehold over the UK's airports.

"It is not right for one company to run more than one airport in London and both Glasgow and Edinburgh airports."

Bob Atkinson, of travelsupermarket.com, said: "Regardless of the reasons behind today's announcement, it remains a fact that BAA has a stranglehold on Scottish aviation, as well as a dominant position in south east England. It's not great news for passengers, especially from a customer service point of view."