Airports for sale
[23rd April 2008]
Following the Competition Commission’s report on airport operator BAA there is now the possibility that some of the UK’s major airports, including Gatwick, could soon be for sale.
If the Competition Commission (CC) does decide that BAA’s ownership of seven UK airports – including three London airports: Heathrow, Gatwick and Stansted airport; the two largest Scottish airports: Glasgow and Edinburgh; plus Southampton airport – is anti-competitive, then the most likely candidate for a sale is Gatwick airport.
BAA may even decide to sell Gatwick before the CC forces its hand, which would help clear some of the £10 billion of debt taken on by its owner Ferrovial when it bought BAA. The sale of Gatwick airport would increase the chances of a second runway being built there as a new owner tried to compete with other airports including Heathrow.
In Scotland, the break up of BAA’s stranglehold on the country’s main airports would mean either Edinburgh airport or Glasgow airport coming up for sale. There is even the possibility the CC may decide that the sale of Southampton airport would allow it to compete more effectively with London airports.
Not surprisingly, budget airlines have reacted positively to the CC’s apparent intentions to force BAA to sell some of its airports. “Monopolies don’t work. Competition does,” says spokesman for low fares airline Ryanair, Peter Sherrard.
“The recent chaos at Heathrow’s Terminal 5, the continuing long passport and security queues at Stansted, and the 47% price increases at Gatwick Airport clearly proves that the BAA monopoly over the London airports is bad for consumers, bad for passengers and bad for UK tourism,” adds Sherrard.
Chief executive of easyJet, Andy Harrison, calls for a radical reform of the airport system in the UK. “Breaking up BAA alone is not enough or even the first step. We need a fundamental overhaul of UK airport regulation which will introduce more competition and tougher regulation. Transferring ownership of our major airports from one highly indebted monopolist to another will benefit no one apart from the City deal-makers,” he says.
Written by: Nick Purdom
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