UK regulator says BAA must sell two more airports

The CC has been considering whether there have been any material changes in circumstances since it published its final report on BAA in March 2009, which should give it cause to reconsider the implementation of the airport sales required by that original decision.

The decision was subject to a legal challenge by BAA, which eventually culminated with the

Court of Appeal reinstating the CC’s findings in October 2010. In February, the Supreme Court refused BAA permission to appeal further.

The CC has provisionally 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.

The CC has also concluded that there is no reason to change the original timescale with the Stansted sale followed by sale of one of the Scottish airports. The original timescale included the sale of Gatwick, which BAA sold in December 2009 to a consortium led by Global Infrastructure Partners.

The CC said that, since its final report, there appears to be greater capacity available that will increase the potential for competition between the London airports. Whilst the new ownership of Gatwick is too recent for the CC to base any conclusions on, it has provided a foretaste of the benefits that competition can bring.

The CC said that there has also been no cause to alter its view on the need for either Edinburgh or Glasgow to be under separate ownership.

It terms of the timing and sequence of the sales, the CC said it sees no reason to change those, and, if anything, the case has been strengthened as the conditions for airport sales have improved slightly since the originally decision was made.

However, the CC will allow the airports to be sold in sequence with a small overlap between the two sales periods, with Stansted to be sold first as it serves more passengers.

Whilst there are reasonable concerns on setting a fair timetable for the sales process, it is also right that passengers and airlines should not have to wait indefinitely for the improvements that will arise from greater competition.