BAA break-up: harsher than expected, but necessary

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The UK Competition Commission’s long-awaited provisional ruling on BAA’s ownership of seven UK airports is harsher than many expected, but is arguably what’s needed to improve conditions at London’s airports.

The CC today said that two of BAA’s three London airports should be sold, along with either Edinburgh or Glasgow.

It’s highly unlikely that BAA will let go of Heathrow, so it looks like Gatwick and Stansted will be looking for new owners next year.

Airlines that use BAA’s airports and have been complaining for some time about the high fees and lack of service that they attribute to monopoly ownership have predictably welcomed today’s provisional ruling.

EasyJet congratulates the ruling, but says the break-up is only worthy of a bronze medal, whereas the gold medal would go to better regulation.

And Ryanair, which has been scathing in its relentless attacks on Stansted, reminded everybody today that it had “long called for the break-up of this abusive monopoly, which ignores the needs of airlines and the travelling public and charges rip-off prices for abysmal services”.

As anyone who has travelled through either Heathrow, Gatwick or Stansted can attest, the level of service often leaves a lot to be desired. Overcrowded, understaffed and unpleasant are three words that come to my mind. Hopefully things will improve when all three airports are competing with one another under separate ownership.

However, it looks like BAA does not plan to give up without a fight. In a statement today, the airports operator, which is owned by Spain’s Ferrovial, said it will “continue to point out to the Commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counter-productive”.

The CC will publish its final report on the matter in the first quarter of 2009. What are your thoughts? Has the CC made a fair assessment? And would things improve under separate ownership?

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3 Responses to BAA break-up: harsher than expected, but necessary

  1. Nicolas 20 August, 2008 at 3:19 pm #

    Service to passengers and to airlines is one thing, but I really doubt that breaking up BAA will make building new runways easier…

  2. Chris Weavers 20 August, 2008 at 3:33 pm #

    It’s really about time that someone took action against an organisation that has seemed intent on maximising it’s profitability by turning the airports into overcrowded shopping centres.
    Their hunger for quick profits outweighs any customer service desire.
    Arriving at Heathrow from any destination early morning and trying to transit via this airport can see a pure exercise in cynicism! A queue outside the queueing area for the security check can see that as the peak dies down the number of x-ray machines is reduced to keep the queue just to the door. The same inconvenience awaits at almost any security check – only a few are ever working at the same time and the self-loading cargo are just expected to put up with it.

    The same is happening in Australia where the shareholders/owner of Sydney Airport has the same philosophy for Sydney. Reduce convenience for passengers and their friends at the international domestic terminal and expand the shopping centres inside. Remove virtually all casual pick up points at the domestic terminal (many people get picked up by family) and then charge 15AUD just to park for a moment,
    Specialist at taking over former state owned monopoly assets are experts at extracting the dollar and not giving two hoots about the travelling public.

  3. Michael Pook 20 August, 2008 at 10:31 pm #

    ‘Casual pick up’ rang a bell. Being met by a taxi at LHR T4 and on the mobile I suggested to come through the arrival area road and avoid the parking fee but apparently this is not possible without paying! Years ago I described LHR as ‘a good third world airport’ and saw this picked up by the national press. The obsession with profit generation may have been bad with BAA’s former owners but can only get worse with the new one who have taken on a staggering loan cost to buy it. Competition/regulatory intervention are essential.

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