BAA has ruled out selling Stansted Airport in order to settle fears in the industry that there is too little competition between UK airports.
The Office of Fair Trading (OFT) looks set to refer the supply of airport services by BAA to the Competition Commission (CC) for investigation.
BAA owns Heathrow, Gatwick, Stansted and Southampton in the South East, and Edinburgh, Glasgow and Aberdeen in Scotland and has an annual turnover of £2 billion. The OFT is concerned that BAA handles more than 60 per cent of all air passengers in the UK.
It says without competition - investment at Stansted and other airports could be "inefficient and costly for air passengers and the UK".
More competition, it says, would create expansion that "takes place in a timely, cost effective manner" and is focused on the needs of airlines and the travelling public.
John Fingleton, OFT chief executive, said: "We believe that the current market structure does not deliver best value for air travellers in the UK, and that greater competition within the industry could bring significant benefits for passengers.
"There is evidence of poor quality and high charges - BAA's investment plans, which are of great importance to the UK, have raised significant concerns among its customers. These are signs of a market not working well for consumers and we believe that a full inquiry into BAA's structure is justified."
BAA responded by saying it does not think separate ownership will address the problems facing airports stating: "There is no intention on the part of BAA to sell any of its airports."
Stephen Nelson, chief executive of BAA, said: "I welcome the opportunity to have a thorough review of the UK airport market, but I am concerned at the OFT's narrow focus on the structure of BAA.
"The real problem for passengers is lack of capacity, not the structure of BAA. This shortfall is the result of a complex interplay of political, planning and environmental issues, all of which need examination.
"There is a great opportunity over the coming years to deliver dramatic improvements for passengers using our airports, but this requires a regulatory system that encourages investment. I do not believe the current regulatory model in the South East fits this purpose."
The OFT is due to make a final decision about referring BAA to the commission imminently.
Source: Harlow Herald
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