Gatwick and Stansted airports could be sold

Gatwick and Stansted airports could soon be up for sale if, as expected, the Competition Commission orders the break up of BAA’s airports monopoly this week.

Airport operator BAA seems to have already accepted that it will be forced to sell Gatwick airport, and possibly others as well. In an interview on the BBC News Channel, BAA chairman Sir Nigel Rudd conceded it was likely the Competition Commission would order the break up of BAA’s monopoly.

As well as Gatwick and possibly Stansted airport, BAA could also be asked by the Competition Commission to dispose of one of its three Scottish airports – perhaps Glasgow or Edinburgh.

There is likely to be no shortage of interest from buyers in whatever airports are put up for sale. If Gatwick airport goes to auction, bidders could include Manchester Airport Group and a number of overseas groups such as the Australian airport operator Macquarie, GE-Credit Suisse Investment fund, and German company Hochtief.

Low cost airline Ryanair has already expressed an interest in putting money into Stansted airport. Chief executive Michael O’Leary says the airline has offered to pay for a second runway and terminal at Stansted for less than a quarter of the £4 billion BAA has said it will cost to develop them.

Never one to be shy of publicity, O’Leary has written a letter in this morning’s Financial Times explaining why he thinks BAA’s airports monopoly should be broken up.

“We sincerely hope the Competition Commission will not opt for an ineffective half-measure such as that proposed by the BAA of just selling Gatwick. On its own this will not deliver effective competition, since it will leave the BAA monopoly with ownership and the ability to waste billions of pounds at the other two London airports,” O’Leary writes.

“What is needed is for Gatwick, Stansted and Heathrow to compete with each other offering passengers what they want which is low-cost and efficient airport facilities,” he argues.

As well as ordering the sale of Gatwick airport, the Competition Commission may also call for a second runway to be built at Gatwick. The government favours new runways at Heathrow and Stansted before Gatwick, but the Competition Commission report may encourage it to reconsider.

Written by: Nick Purdom