BAA Chief: Order To Sell Stansted 'Draconian'

Airport operator BAA must sell Stansted Airport and either Glasgow or Edinburgh airports, the Competition Commission has confirmed.

BAA’s chief executive Colin Matthews told Sky News the decision, which aims to increase competition in the sector, was “draconian and unreasonable”.

He added it would damage the company, which has been investing in UK jobs and facilities.

Spanish-owned BAA runs six UK airports including Heathrow and has been the subject of a Competition Commission investigation since 2007.

In a report in March 2009, the commission said BAA must sell Gatwick as well as Stansted and either Edinburgh or Glasgow.

Stansted airport terminal

BAA argues that Stansted serves a different market to those who use Heathrow

Gatwick was sold later that year to an investment fund called Global Infrastructure Partners, which owns London City Airport.

BAA said that sale, plus changes in Government policy that have ruled out new runways in south east England, have significantly changed the airport market.

“It’s more and more clear that Heathrow and Stansted serve different marketplaces,” Mr Matthews told Sky News.

“Not a single airline flies to both or wishes to fly to both – so there is no reason to be required to sell Stansted.”

Gatwick Airport

BAA sold Gatwick airport to Global Infrastructure Partners for £1.5bn in 2009

BAA has been fighting the 2009 ruling but in a final report the Competition Commission (CC) said the sale of the airports was fully justified.

The sale process will start in three months “or sooner if undertakings are accepted from BAA in the meantime”, the CC said.

Peter Freeman, the CC’s chairman of the BAA remedies implementation group, said: “Our report has been challenged, reviewed and upheld and it is clear that the original decision to require BAA to divest three airports (including Gatwick) remains the right one for customers.”

He went on: “The introduction of new ownership at Gatwick, while too recent for us to draw any firm conclusions, has given a foretaste of the benefits competition can bring.”

The CC said Stansted should be sold first as it served the larger number of passengers and there would be a small overlap between the Stansted sale and that of one of the Scottish airports.

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