Regulator requires BAA to sell Gatwick, Stansted, Edinburgh

London
Source:
This story is sourced from Pro
See more Pro news »

Competition regulators in the UK have confirmed that they will impose a requirement on airports operator BAA to sell London Gatwick, London Stansted and Edinburgh airports.

The UK Competition Commission is to submit a list of recommendations to the Government designed to improve the efficiency of airport regulation, including a licence-based approach to provide more flexibility for regulator intervention.

It will also introduce measures to ensure investment and service levels meet airlines' and passengers' needs more effectively.

While the decision is subject to consultation, and a final ruling is due by around March next year, it reinforces the Competition Commission's position following its in-depth review of the UK airports market.

It had already warned that BAA - which runs seven airports in the UK - would probably have to sell two of its London airports and one in Scotland.

Competition Commission airports inquiry chairman Christopher Clarke says: "Having provisionally identified competition problems at each of BAA's seven airports, we are proposing remedies which address them directly and comprehensively through a combination of divestment and other measures to improve investment and levels of service.

"The most effective way to introduce competition in the southeast and in lowland Scotland is to require the three London airports and the two principal Scottish airports to be separately owned."

While it identifies Edinburgh as the primary Scottish candidate for sale, the commission says it "remains open" to view on selling Glasgow as an alternative.

BAA, owned by Spain's Ferrovial, has already started the process of divesting London Gatwick.

The operator says, however, that it does "not believe" that the Competition Commission has put forward a "compelling" case for BAA to sell London Stansted as well.

"We remain concerned that its proposed remedies may actually delay the introduction of new runway capacity [at Stansted]," says BAA chief Colin Matthews.

He adds that the commission has "not provided any substantial evidence" to back its conclusion that BAA's main Scottish airports, Edinburgh and Glasgow, would compete under separate ownership.

"We believe there is no justification for specifying which of these airports should be sold," he says. "We will continue to make our case to the Competition Commission."