BAA airport sell-off: consumer boost or weak compromise?
The Competition Commission has ordered airport operator BAA to sell Stansted and either Edinburgh or Glasgow aiport, once it has completed the sale of Gatwick. The commission has been looking into BAA’s dominance of airports in Scotland and England’s south-east for two years and decided that the lack of competition between airports has been detrimental to passengers.The commission’s final report also recommends that the airports be sold within two years and that they be sold in sequence, starting with Gatwick.
BAA was acquired by Spanish company Ferrovial in 2006 for 10 billion pounds but has been hit hard by the economic downturn. The firm has said that it may challenge the order to sell because such quick sales in such conditions could be impractical.
Whether the order to sell will actually benefit air passengers is a much debated issue. A spokesperson for Virgin Atlantic told The Times that the airline supports the move. ““The break-up of BAA is something Virgin Atlantic has requested for many years and it will undoubtedly benefit consumers. Better airport facilities in the UK and lower prices will be the result and we therefore congratulate the CC on its findings.”
Paul Whelan, head of industry body the Small to Medium Airports Group, disagrees, telling the BBC that it will do nothing for the consumer. “There are a lot of airlines including Ryanair using Edinburgh and it is doing a good job, while Stansted has also been good for airlines.” The BBC also has this Q&A which asks if this is a good move for air passengers.
The Telegraph’s Transport Editor, David Millward, meanwhile writes that the Competition Commission’s report is a ‘weak compromise.’ “After all it is not BAA that has suddenly decided to charge for the clear plastic bags people need to carry liquids through security. It is Manchester Airport, whose owners have been tipped to bid for Gatwick or Stansted.
“In many ways the Competition Commission report is a weak compromise. Many are disappointed that Heathrow was not broken up with terminals competing against each other for business. That worked at JFK in New York and it could well have worked here.”
So who will possibly step in to buy the airports up for sale? It’s a complicated business; the commission has ruled that each should be bought by a different company and potential owners will be put under tough scrutiny. The Guardian has published this guide to the companies in the running.
What do you think of the Competition Commission’s decision? Do you think forcing BAA to sell some of its airports will improve customer experience? What do you think of the current standard of the airports in question?
posted by Travelrobe at
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