Three of Seven UK Airports May Have to Be Sold

Citing competition problems that are caused by their common ownership, the UK Competition Commission has recommended that BAA sell two of its London locations and one Scottish airport

Citing competition problems that are caused by their common ownership, the UK Competition Commission has recommended that BAA sell two of its London locations and one Scottish airport.

BAA is largest owner of airports. It is owned by Ferrovial, a Spanish group that characterizes itself as specialized in “developing, financing, maintaining and managing transport, urban and services infrastructure.” The London area airports are Heathrow, Gatwick and Stansted. The three Scottish airports are Glasgow, Edinburgh and Aberdeen. Additionally, BAA owns Southampton in the south part of England. A final report is to be issued in the first quarter of 2009.

The Commission cited competition problems that stem from the planning system, certain aspects of governmental policy and the system of regulation. Among other factors cited by the Commission was BAA’s, "lack of responsiveness to the needs of its airline customers and a lack of initiative in planning capacity. This has resulted in investment that is not tailored to the requirements of airport users and lower levels and quality of service for both airlines and passengers."

It is doubted that BAA will be forced to sell Heathrow, the third largest handler of air freight in Europe. Reaction from airlines and freight forwarders has been supportive of the Commission’s conclusions, feeling, for example, that ownership of the three London airports by one group has prevented competition between them.

For its part, BAA has said, “We note this is not the end of the Competition Commission process and we will continue to point out to the Commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counterproductive.”

Britain’s largest union, Unite, has indicated it has concerns about job losses, lower wages and working conditions if and when airports are sold. Unite represents 75,000 civil aviation workers at all UK airports, with 6,000 working directly for BAA. "Any attempt to break up BAA will be resisted,” says Steve Turner, national secretary of Unite. “This union and our members will not sit back while the market plays games with their jobs and their terms and conditions of employment."

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