Q&A: the 'emerging thinking' on BAA
Updated on 22 April 2008
This morning the Competition Commission (CC) has released an "emerging thinking" document discussing BAA's ownership of seven UK airports, including Heathrow.
Q. What is at the heart of the CC's "emerging thinking" document?
A. BAA's common ownership of seven UK airports "may not be serving well the interests of either airlines or passengers," the Competition Commission said, although no conclusions have been reached at this stage.
Q. When is the CC's provisional report into BAA and UK airports due?
A. The CC is expected to publish its provisional findings in August and "if competition problems are identified, it intends to set out its possible remedies at the same time, whether requiring the sale of one or more of BAA's airports or otherwise".
Q. And the final report?
A. By the end of the year.
Q. Why did the Office of Fair Trading refer BAA to the CC in the first place?
A. The OFT said that there was evidence of "poor customer satisfaction" and that in the south east BAA's airports handled 90 per cent of passenger trips "and these airports could, under separate ownership, compete to attract air passengers".
Which airports does BAA own in Britain?
BAA owns seven airports including Heathrow where both BAA and British Airways have come under fire for the shambolic opening of Terminal 5.
It has been suggested that Spanish-owned BAA could sell Gatwick airport. Its other UK airports are Stansted, Southampton, Edinburgh, Glasgow and Aberdeen.
Q. What conclusion has the CC made about BAA's impact on airport competition so far?
A. "The CC is inclined to the view that common ownership of the BAA airports is a feature of the market that adversely affects competition between airports and/or airlines.
"Currently, there is no competition between BAA's three London airports (Heathrow, Gatwick and Stansted) and only very limited competition from non-BAA airports (including London City and Luton).
"Similarly, there is no competition between their two airports in lowland Scotland (Edinburgh and Glasgow) although Glasgow does face competition from one non-BAA airport (Prestwick)."
Q. What else has the CC said at this stage?
A. It is concerned that BAA's financial structure, with its dependence on a single group parent balance sheet, might prevent the airports maintaining good standards of investment and ultimately service.
