BAA Lose appeal – Stanstead to be sold
July 21, 2011
The UK’s Competition Commission has formally ordered BAA to sell Stansted Airport in Essex, and either Edinburgh or Glasgow airport, after an appeal by the operator was dismissed.
BAA had argued in its appeal that since the commission ordered it to sell the airports in March 2009, there had been a change in government policy which rendered the sale unnecessary.
It said the commission had then argued that the operator’s ownership of so many airports in the south of the UK was holding back the development of new runways. The operator had already been forced by the commission to sell Gatwick Airport.
But since then, there had been a general election and the new government had decided there was no need for new runways.
However, the commission concluded that the sale of the airports was fully justified, and that airlines would benefit from greater competition with the airports under separate ownership, despite the current government’s decision on new runways at London airports.
CEO Colin Matthews said BAA was dismayed by the decision and would consider a judicial review of the commission’s decision.
“A new government has changed aviation policy to rule out new runway capacity in the south-east and BAA has sold Gatwick Airport. Both are significant changes to the airport market,” it said.
“Further, the airports in question face increased competition from non-BAA airports – particularly those in Europe – for the business of low-cost carriers that now take a pan-European view of the market.
“It is also clearer than ever that Heathrow [also owned by BAA] and Stansted serve different markets.”
Competition Partner at law firm DLA Piper Duncan Gillespie said he was not surprised by the decision, given the amount of time and energy the commission had invested in the process.
He added that if BAA were to insist on a judicial review, it would need to brought within two months.
The commission said the sales process should start in three months’ time – or sooner if BAA accepted the sale order without going for a review.
