T5 Debacle The Final Straw As BAA Is Ordered To Sell Airports

Airport owner BAA has been told to sell two of its London airports by the Competition Commission. In a report on the state of the UK’s airports, BAA was heavily criticised for problems at each of its seven airports, particularly the delays and poor standards experienced at Heathrow which ‘shamed the nation’ during the opening of Terminal 5 earlier this year.

In addition to the forced sale of two of its London hubs, BAA will also have to break up its monopoly in Scotland with the sale of either Glasgow or Edinburgh airport. According to the BAA Airports inquiry group, the lack of competition arising from the BAA monopoly was evident from their ‘lack of responsiveness’ to passengers needs, and a ‘lack of initiative in planning capacity’.

The report states that with each of London’s airports under the same ownership, BAA was unable to make decisions in the best interests of any individual airport, fearing an adverse effect on another in the same region. The report also advised that if Stansted, Gatwick and Heathrow were in competition, many previous problems would have been less likely to happen.

Many leading airlines will be welcoming the Commission’s findings having been long term advocates of a BAA break up, notably easyJet, Ryanair and Bmi. One spokesman from American Airlines even hailed BAA owned Heathrow as the worst in Europe due to a lack of funding, branding it a “bit of a dump”. Former London mayor Ken Livingstone was also heavily critical of Heathrow, claiming the opening of Terminal 5 “shamed the capital”.

BAA has taken a strong defensive stance following the Commission’s report, with chief executive Colin Matthews stating:

“The Commission's findings state that the lack of runway capacity is a main reason for what it calls the current poor standards of service and the lack of resilience at times of disruption, which results in regular delays.

We will be seeking urgent clarification from the Government of how it believes this report's findings can be reconciled with the air transport policy it established in 2003 and its current review of economic regulation.”

BAA also argued that both Edinburgh and Glasgow Airports serve separate markets, and therefore would not compete with each other, regardless of ownership.