UK airport operator BAA will be required to sell Stansted Airport, followed by Edinburgh or Glasgow Airport, the Competition Commission (CC) confirmed today.
The decision upholds the CC’s earlier provisional view, which was published in March.
The CC had been considering whether there were any material changes in circumstances since it published its final report on BAA in March 2009 that should give it cause to reconsider the implementation of the airport sales.
However the CC has now concluded that the sale of the airports is fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate ownership.
The sales process will start in three months’ time—or sooner if undertakings are accepted from BAA in the meantime. Stansted will be sold first as it serves the larger number of passengers, followed by one of the Scottish airports.
Commenting on the decision, the CC’s chairman of the BAA Remedies Implementation Group, Peter Freeman, said: “We hope that the sales can now proceed without delay so that passengers and airlines can start to enjoy the benefits of greater competition.
“Our report has been challenged, reviewed and upheld and it is clear that the original decision to require BAA to divest three airports remains the right one for customers. It has been a long process whilst BAA has challenged the decision—quite understandably given its significance. However, both we and the courts have now exhaustively re-examined the case for the sales and found it to be sound so there are no grounds for delaying further.”
Freeman went on to say that new ownership at Gatwick had seen promising results, and that putting Stansted, Gatwick and Heathrow in competition with one another would bring even greater benefits.
BAA’s chief executive Colin Matthews responded to the decision by saying: “We are dismayed that the Competition Commission's final decision still requires BAA to sell Stansted and either Glasgow or Edinburgh airport. The Competition Commission has not recognised that the world and BAA have changed.
“This decision would damage our company which is investing strongly in UK jobs and growth. We have a responsibility to protect our shareholders' investment and we will now consider a judicial review of the Competition Commission's decision.”
BAA said that its owner, Spain-based Ferrovial, has invested £5 billion in UK airports since acquiring the company in 2006 (including over £300 million at Stansted), and is currently investing a further £1 billion a year. It added that BAA's operational performance has improved, with shorter security queues, more reliable baggage delivery and greater flight punctuality.
BAA currently operates six UK airports including London’s Heathrow, the world’s fourth busiest airport.
