Ruling expected on airports sale
Monday 18 July 2011
Competition chiefs are expected to finally confirm tomorrow that airport operator BAA will have to sell two of its airports.
The ruling by the Competition Commission (CC) will end two years of hiatus since an original decision in 2009.
At that time the commission ruled that BAA would have to sell Gatwick and Stansted airports as well as either Edinburgh or Glasgow airport.
But there were then a series of legal challenges by BAA to the ruling, which ended with the CC findings being upheld.
The CC then considered whether there had been material changes in circumstances since the 2009 ruling.
In a provisional ruling in March this year, the commission said the sale of the airports was still fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate ownership.
BAA has already sold Gatwick. The West Sussex airport was bought by US-based investment fund Global Infrastructure Partners for around £1.5 billion in late 2009.
Making the provisional ruling in March this year, the CC chairman Peter Freeman said: "We remain convinced that the original decision to require BAA to divest three airports (including Gatwick) is the right one for passengers and airlines.
"We have re-examined that decision in the light of a significant subsequent development when the Government decided to rule out further runways at London's airports. Having examined the case closely, we are clear that many benefits will still arise without that expansion, by increasing competition and addressing detrimental effects from BAA's common ownership."
He went on: "We found that, if anything since the report, there now appears to be greater capacity available which will increase the potential for competition between the London airports. The introduction of new ownership at Gatwick, whilst too recent for us to base any conclusions on, has also given a foretaste of the benefits competition can bring. There has also been no cause to alter our view on the need for either Edinburgh or Glasgow to be under separate ownership."
Mr Freeman said the CC would continue to allow the airports to be sold in sequence with a small overlap between the two sales periods with Stansted to be sold first.
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