Competition Commission Forces BAA Stansted Sale

 

BAA, the British airport operator, is now compelled to sell London Stansted Airport and one out of Edinburgh or Glasgow airports, as dictated by the Competition Commission.

Re-stressing a preliminary decision announced in March, in response to an appeal made by BAA's controlling group, Spanish firm Ferrovial, the commission has now given its final word on the matter.

Now, a two-year battle has been brought to an end, with BAA the losing party. In March 2009, BAA was the position of owning no less than seven airports in the UK. However, the commission said this was, in effect, unfair, and, shortly afterwards, London Gatwick airport was sold to GIP (Global Infrastructure Partners) through a £1.5bn deal. 
 
BAA Airport Sale  
That same message of enhancing competition opportunities within the airport industry, for the benefit of both carriers and passengers, was asserted again today by the CC in its ultimate 
BAA airport sale announcement.

"The CC has concluded that the sale of the airports is fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate ownership, despite the current government's decision to rule out new runways at any of the London airports", it stated, adding: "The sales process will start in three months' time, or sooner if undertakings are accepted from BAA in the meantime."

BAA itself has hinted at the possibility of legal action and, in its statement, said that the CC's sale verdict would "...damage our company which is investing strongly in UK jobs and growth."
 
Stansted Airport Sale  
"We have a responsibility to protect our shareholders' investment and we will now consider a judicial review of the Competition Commission's decision", it explained, adding that 2009's and 2011 market conditions are quite different but that's not, apparently, evident to the CC. "A new government has changed aviation policy to rule out any new runway capacity in the south east [of England] and BAA has sold Gatwick Airport. Both are significant changes to the airport market", BAA said, in further comments on the proposed Stansted Airport sale.

According to the CC, London Stansted Airport should be the first to go, with one of the pair of Scottish hubs following thereafter.