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BAA could be forced to get rid of at least one of its airports to ensure standards are raised at the ones it retains, as a result of the Competition Commission’s (CC’s) investigation into the supply of airport services by BAA in the UK.
The Office of Fair Trading made the reference to the CC in March. The CC will now determine whether or not there are any features of the market that prevent, restrict or distort competition and, if so, what remedial action might be taken. BAA owns seven airports: Heathrow, Gatwick, Stansted and Southampton in England; and Edinburgh, Glasgow and Aberdeen in Scotland.
Tom Morrison, an associate at Rollits Solicitors, says the investigation has come about largely as a result of the level of complaints about the standard and availability of facilities at BAA’s airports, most notably at Heathrow, coupled with the belief among many that operational and capacity issues would be addressed quicker and more effectively by an owner which was facing competition from neighbouring airports.
“One of the outcomes of the investigation could well be that BAA is forced to divest of one or more of its airports in the hope that standards at the retained and divested airports will be raised as a result of having to compete for airlines and travellers’ business,” he says.
BAA, he adds, does not deny there are problems, but puts the blame on planning and other regulatory issues. “Whether BAA would put more time, effort and money into overcoming those issues if it faced competition from rival airport operators is something which should become apparent once this investigation has been completed. While we cannot pre-judge the outcome, common sense would seem to indicate that it is not healthy for one airport operator to have such dominance over the handling of flights in the south east,” he says.
