BAA flies into a rage over Competition Commission ruling

The regulator has just delivered its final verdict on BAA's appeal against the original ruling that it needed to flog more of its airports. Here's a hint: the airport operator isn't happy...

by Emma Haslett
Last Updated: 20 Aug 2012
It’s been almost two and a half years since the Competition Commission told BAA that it was going to have to sell off Gatwick, Stansted and either Glasgow or Edinburgh airports. But the Spanish-owned airports operator was having none of it: it complied with the request to sell Gatwick, but then challenged the decision – the final verdict on which was delivered this morning. The decision? Fairly predictable, we’re afraid: BAA has been told (again) that it’s got to comply with the original ruling. But BAA has no intention of rolling over this time, either…

It’s the latest episode in a prolonged and convoluted drama. After its original decision was challenged by BAA back in 2009 challenged, the CC agreed to review it – but it decided earlier this year BAA would still have to comply. In October last year, the Court of Appeal also ruled against BAA, while the Supreme Court refused it permission to appeal further earlier this year. You’d think the Spanish-owned firm would have got the message by now…

The thinking behind the CC’s ruling is that by forcing BAA to sell off some of its airports, it will encourage competition at other airports, including the building of new runways. It probably doesn’t help BAA’s argument that, in the case of Gatwick, which was sold in 2009, that’s already started to happen: since the airport’s new owner Global Infrastructure Partners gave it a makeover, it’s supposedly begun to lure airlines away from the likes of Stansted. That’s presumably also got a lot to do with its exemplary reaction to the snow chaos during the winter (as opposed to BAA’s chaotic one). A new security area set to open in its south terminal later this year will no doubt help too.

But BAA argues that the original ruling is now well out of date. Since the Coalition took over in Westminster in May last year, it says, the goalposts have moved – because they’ve vetoed the idea of any more runways opening in airports in south-east England. Equally, it claims, Heathrow (the jewel in its crown) ‘does not serve the same market as Stansted’ because it’s the UK’s ‘only’ hub airport. It also points out that it’s invested £5bn in UK jobs over the past few years – which is precisely the sort of thing the Government wants to hear.

Either way, the company has vowed to fight on – possibly via a judicial review – so chances are a sale won’t go ahead within the three months stipulated by today’s report. And who knows, it might be useful just to delay the process. If BAA can spin things out for another couple of years, there’s an increasing chance that the CC will agree that its original ruling is out-of-date and needs to be revisited. Cunning…

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