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BAA's monopoly in terminal decline

Melanie Stern, Financial Director, 24 Aug 2008

Airports operator BAA may be forced to sell three of its seven UK airports to pave the way for competition, the Competition Commission announced in late August

BAA airports enquiry chairman Christopher Clarke blasted BAA’s poor service and blamed its lack of capacity on bad planning, as well as failure to exploit growth opportunities across its portfolio.

“There are competition problems at each of BAA’s seven airports with adverse consequences for passengers and airlines,” the Commission said. “A principal cause is their common ownership.”

BAA, whose principal shareholder is Spanish transport operator Grupo Ferrovial, said in response that the Commission’s recommendation of a fundamental review of the company risked delaying delivery of new runways that would answer these issues, “making better customer service less, not more, likely,” according to BAA chief executive Colin Matthews.

BAA criticised the Commission’s review process calling it “flawed” and suggesting its recommendations were “disproportionate and counter-productive.” Consultation is ongoing and the Commission is inviting views on its guidance until late September.

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