CC ruling signals change for UK aviation

The Competition Commission (CC) has ruled that BAA (as reported earlier by Cheapflights) must sell three of its UK airports, ending its monopoly of aviation centres in London and Scotland.

London Gatwick Airport, London Stansted Airport and either Glasgow Airport or Edinburgh Airport will have to be sold by the Spanish-owned operator, following the regulator's publication of its final market inquiry.

Given a timetable of three years to complete the sales of all three locations, BAA's portfolio will be reduced to Southampton Airport, London Heathrow Airport, Aberdeen Airport and either of the Scottish airports after this period.

Christopher Clarke, chairman of the BAA Airports inquiry, expressed optimism that this decision would bring benefits for travellers and airlines.

He said: "Such action can take a number of forms, including lower prices, improved levels of service and more efficient investment in response to customers' needs. This news was welcomed by many in the industry, including a number of airlines and consumer groups.

Jim Callaghan, Ryanair's director of legal and regulatory affairs, believes that BAA's monopoly damaged passengers' experiences.

He said: "Monopolies don't work. BAA … has done enormous damage to competition and the travelling public and Ryanair welcomes the CC's recommendation to break-up the BAA Airport monopoly."

This view was supported by Chris Cuddy, chief executive of Cheapflights.co.uk, who agreed that competition is "good for consumers".

He said: "Well funded owners of the three airports should bring fresh impetus to improving services and facilities for both consumers and airlines."

Rather more explicitly, Paul Charles, a spokesman for Virgin Atlantic, indicated that this ruling will lead to fare reductions. "If there is decent competition the prices will come down," he explained to the BBC.

However, this saga may not have drawn entirely to a close, as BAA is rumoured to be considering appealing this decision, which has been described by The Financial Times as the "most draconian corporate divestiture" the CC has ever demanded.

A statement on BAA's website insisted that the Ferrovial-owned operator is aware that its customer service can be improved - though it suggested that the CC's tools are excessive.

BAA said: "We accept the need to change … However, we believe the commission's analysis is flawed and its remedies may be impractical in current economic conditions."

Whatever happens, the sale of London Gatwick Airport is already underway and possible bidders are presently being investigated.

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