BAA will have to sell airports

18 Dec 2008 by Sara Turner

UK watchdog the Competition Commission (CC) has confirmed that it requires BAA to sell Gatwick, Stansted and Edinburgh Airports.   

It also wants new measures to improve investment and service levels at Heathrow and possibly Gatwick and Stansted so the airports "meet more effectively the needs of airlines, passengers and other airport users."

The CC also said it was proposing ways to improve investment at Aberdeen, another BAA airport.

The decisions of the CC are subject to "final consultation" but easyJet, one of the largest low cost carriers in Europe, has already welcomed the proposals.

In its report, the CC said it plans to make recommendations to the UK government for a more effective and flexible system of airport regulation and "also on aspects of government airports policy."

Christopher Clarke, who chaired CC's BAA Airports inquiry, said: "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.

Mr Clarke said the "most effective way" to get competition in South East England and lowland Scotland was separate ownership.

Gatwick, Stansted and Edinburgh must be sold, leaving BAA owning Heathrow and Glasgow Airports.

Under the ownership of BAA, there was "no competition", said Mr Clarke.

With separate owners, there would be "a much greater incentive to be far more responsive to their customers, both airlines and passengers."

Mr Clarke said he accepted that changes to airport policy could take time, so the CC has recommended immediate actions at Heathrow and possibly Gatwick and Stansted to put more focus on customer needs.

On the sale of Edinburgh, the CC said it was open to the possible alternative sale of Glasgow Airport.

The CC said it will now take views from the industry and planned to publish its final report either in late February or early March 2009.

Andy Harrison, ceo of eayJet, said: "We welcome the Competition Commission's remedies, but they can only address part of the problem.

"The simple fact is that airports like Gatwick are a monopoly and simply changing the ownership will not change that fact.

"On the contrary, any new owner of Gatwick will have to pay a full price and will have every incentive to exploit the weaknesses of UK airport regulation with air passengers having to pick up the bill yet again.

"Until there is dramatically more airport capacity in the South East, each of the BAA airports will continue to operate as local monopolies and monopolies rarely act in the interests of their customers."


Report by Stanley Slaughter

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