Is the break up of BAA inevitable?

It certainly looks that way.

The business and political arguments for splitting up the world’s largest airport group – BAA’s seven airports dwarf every other group according to the Airline Business airport financial ranking – seem to become more compelling as each week goes by.

It is the possible break-up of the London Heathrow/Gatwick/Stansted BAA trio that has the widest ramifications. The UK’s Competition Commission says it will take a year to make its recommendations.

The troubles at BAA have been severe over the past months.

The security woes at all three London airports, with Heathrow particularly in the spotlight, has highlighted investment and planning failures that a company of this stature should have been able to handle better. Yes, the rules and regulations are not of BAA’s making, but dealing with them is.

This past week has seen a climate change protest that has propelled BAA into limelight it would choose to avoid.

But Ferrovial, the Spanish group that owns BAA, need not worry. Buyers are reportedly dead keen on buying bits of the BAA empire with the acquisitive Dubai Aerospace already throwing their hat in the ring.

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3 Responses to Is the break up of BAA inevitable?

  1. Richard Havers 21 August, 2007 at 7:59 pm #

    I’d say yes, definitely. The pressure from every quarter and the fact that it’s no longer British owned make it a no win situation (although Ferrovial are arguably on a win win).

    I’d say it’s not just London. Either Edinburgh or Glasgow will get sold off. The interesting thing is will one company try to buy both and create a new can of competitive flow of traffic.

  2. Mark Pilling 21 August, 2007 at 8:17 pm #

    I agree the Scottish airports might be sold too but BAA could keep one of the London airports and retain something of an airports portfolio by keeping Edinburgh and Glasgow too.

    It would be a fascinating battle if these airports became rivals – somehow I can’t see the Scottish devolved government going for that.

  3. Richard Havers 22 August, 2007 at 8:25 am #

    Mark, I think that the Numpties in Holyrood might go for it just to try and prove yet again that they’re different from London. I live in Scotland and I’m more exposed to their rhetoric! We have two major airports too close together, which has always hampered the growth to some extent. Of late the Glasgow growth has slowed considerably (some months there’s even been a decline) and the Scottish Executive’s fund for encouraging new carriers is not working as they wanted it to (around a third of flights that have started under the scheme have stopped).

    What I meant in my clumsily worded last sentence was what if an airport operator bought say Gatwick and Glasgow – they would work hard to have traffic flow between the two as well as to try and divert business away from their rivals. Having said that it’s not, as we all know, as simple as that! Although in the short term we’d see some interesting moves

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