News: BAA face competition inquiry

Flights > News > # 1239 (02/04/2007)

BAA could be forced to sell off one of its three London airports because of concerns over a lack of competition.
The Competition Commission will launch an inquiry focusing on the airport operator’s ownership of Heathrow, Gatwick and Stansted. An initial consultation carried out by the Office of Fair Trading (OFT) found wide support within the travel industry for investigating what Ryanair has called BAA’s “monopoly” of London’s airports. BAA, which was taken over last year by Spanish construction giant Ferrovial, handles more than 90% of all passengers in the London area and 63% nationally.
An OFT statement said: "The OFT is of the view that the competition concerns it identified prior to the consultation exercise remain valid and that an investigation by the Competition Commission is now warranted.”
Airlines fear that charges will continue to rise above inflation at Heathrow and Gatwick, and are also concerned that they will have to pass the cost of a £4 billion expansion project at Stansted on to passengers.
Easyjet is calling on the Competition Commission to carry out a full investigation into whether the UK's major airports are being run in the interests of the travelling public.
Easyjet’s planning director, Andrew Barker, said: "The announcement that the OFT has referred BAA to the Competition Commission clearly demonstrates that there is a problem with the running of our major airports.”
Ryanair chief executive, Michael O’Leary, has accused the BAA of being a Government protected monopoly. Mr O’Leary said: “The only way to improve the lot of passengers is to break up the BAA monopoly airports and force them to compete against each other. Then airline customers would not be forced to endure the black hole of Calcutta that is Heathrow, or the unnecessary over priced Taj Mahal palace being planned at Stansted.
BAA chief executive, Stephen Nelson, said the inquiry will give the Competition Commission to undertake an unbiased review of the UK airport market.
He said: “Our analysis is that the fundamental problem for passengers is lack of capacity, not the structure of BAA. The opening of Terminal 5 next March will begin to address this issue by vastly improving the experience at Heathrow and providing much needed new terminal space.
“We are ready to make major, long-term investments in British airports, that will free the travelling public from congestion and provide a good experience at our airports. We look to the Competition Commission to deliver the right regulatory system and sensible financial incentives necessary to deliver these plans for passengers.”