By Max Clarke

BAA will be required to sell Stansted Airport followed by Edinburgh or Glasgow Airport, the Competition Commission (CC) has confirmed today.

This confirms the CC’s earlier provisional view, which was published in March. The sales process will start in three months’ time–or sooner if undertakings are accepted from BAA in the meantime.

BAA fiercely object to the ruling, stating that over the past 5 years billions have been spent on improving customer service and reducing delays for the overall benefit of the UK economy.

The CC has been considering whether there have been any material changes in circum¬stances since it published its final report on BAA in March 2009 that should give it cause to reconsider the implementation of the airport sales required by that original decision. The decision was subject to a legal challenge by BAA, which eventually culminated in the Court of Appeal reinstating the CC’s findings in October 2010. In February, the Supreme Court refused BAA permission to appeal further.

The CC has concluded that the sale of the airports is fully justified and that passen¬gers and airlines would still benefit from greater competition with the airports under separate owner¬ship, despite the current Government’s decision to rule out new runways at any of the London airports.

Chairman of the BAA Remedies Implementation Group, Peter Freeman, said:

We hope that the sales can now proceed without delay so that passengers and airlines can start to enjoy the benefits of greater competition.

Our report has been challenged, reviewed and upheld and it is clear that the original decision to require BAA to divest three airports remains the right one for customers. It has been a long process whilst BAA has challenged the decision–quite understandably given its significance. However, both we and the courts have now exhaustively re-examined the case for the sales and found it to be sound so there are no grounds for delaying further.

The introduction of new ownership at Gatwick, whilst too recent for us to draw any firm conclusions, has given a foretaste of the benefits competition can bring. We think that these benefits will be all the greater once Stansted, Gatwick and Heathrow are all in competition with each other.
There has also been no cause to alter our view on the need for either Edinburgh or Glasgow to be under separate ownership.

The CC has also concluded that the same timescale should remain for the sale of Stansted followed by sale of one of the Scottish airports. Stansted will be sold first as it serves the larger number of passengers and there will be a small overlap between the two sales periods. In March 2009, the CC indicated a two-year time frame for the sale of three air¬ports–Gatwick has since been sold so that timescale has been amended to reflect that.

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