Operator BAA may have to sell 3 UK airports

20th August 2008, Comments 0 comments

Competition watchdog says the airport operator BAA may have to sell three out of its seven British airports.

20 August 2008

LONDON - Airport operator BAA, owner of London's Heathrow, may have to sell three of its seven British airports, a competition watchdog said Wednesday.

The Competition Commission released a provisional report finding that BAA's dominant market position has resulted in a lack of airport capacity, slow development of new routes, higher charges for users and poor response to customers' requests.

"We have provisionally found that there are significant competition problems arising from BAA's common ownership of seven UK airports," said Christopher Clarke, chairman of the BAA Airports inquiry group.

The commission is now deciding which two of London's three major airports - including Heathrow, Gatwick and Stansted - BAA should be required to sell, and which of either Glasgow or Edinburgh airports it should sell. A final ruling is expected by 28 March.

BAA, a unit of Spanish builder Grupo Ferrovial SA, has said it has no intention of selling Heathrow, Britain's largest airport.

"This is not the end of the Competition Commission process," said Colin Matthews, BAA's chief executive. "We will continue to point out to the commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counterproductive."

Several airlines have long been pushing for the breakup of BAA's stranglehold on airports. The company handles about 90 percent of passenger flights taking off or landing in southeast England, and 63 percent of all flights to and from Britain.

Among the potential buyers for BAA airports are the Manchester Airport Group and Global Infrastructure Partners, the joint venture between Credit Suisse and General Electric's GE Infrastructure fund, which took a stake in London City airport in 2000.

Analysts also named Germany's Hochtief, which bought Budapest airport from BAA, and Australia's Macquarie Group, which owns Brussels and Copenhagen airports.

[AP / Expatica]

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