Stansted Airport to be sold off by BAA

The airport operator has finally given up its legal battle with the Competition Commission, and agreed to sell Stansted to reduce its monopoly.

by Michael Northcott
Last Updated: 19 Aug 2013

BAA has been fighting its corner over airport ownership since 2009, when the Competition Commission said there was not enough competition in UK airports. But BAA today gave up the ghost, saying that it will not appeal to the Supreme Court over the CC’s 2009 ruling, and will proceed with the sale of Stansted. Perhaps it realised the case did not have wings after all…

BAA sold Gatwick Airport to Global Infrastructure Partners that year for £1.5bn. In addition it was ordered to sell either Glasgow or Edinburgh airports, too. Giving up on the Stansted battle means BAA will have to give up London’s third busiest airport, and the UK’s fourth busiest. It did put a parting shot in its press release however, saying that the CC ruling ‘fails to recognise that Stansted and Heathrow serve different markets’. 

Until the 2009 ruling, BAA owned seven airports throughout the UK, carrying 60% of its passengers annually, but in the southeast this was almost a complete monopoly, as it owned almost all the regions airports and carried 90% of the passengers. But now Gatwick has been sold, so has Edinburgh, and Stansted will be off its books before long. The chances of BAA getting a good price for Stansted at the moment are quite slim, but we reckon Ryanair may have a pop at buying the airport. If it's cheap enough then Ryanair CEO Michael O'Leary won't be able to resist having a go: he loves a bargain. 

It is also worth noting that BAA itself is owned the by the Spanish company, Ferrovial, which acquired it in 2006. As a result of the deal BAA was placed in billions of debt which has hampered investment ever since. Now that Heathrow is BAA’s last major international airport, the board has no doubt taken the decision to concentrate on what it sees as its core asset. With the prospect of a competitive new London airport being built in the near future, and the fact that Qatar has just taken a £900m stake in BAA too, the strategic direction of the company is bound to change.   

The sale will leave BAA with four airports: Heathrow, Southampton, Aberdeen and Glasgow. Whilst these are no longer the heady days of near-domination of the UK airport market, Heathrow is still the world’s busiest international airport. Plenty of money still to be made, then…

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