BAA To Sell London Gatwick Airport

by Robert Lee, Tax-News.com, London

22 September 2008

BAA, the operator of seven key UK airports, has announced its decision to sell London's Gatwick airport in response to a report by the Competition Commission, which provisionally found that there are competition problems at each of the airports owned and operated by BAA.

In a statement issued on September 17, Colin Matthews, BAA's chief executive said: "We have decided to begin the process of selling Gatwick Airport immediately. Gatwick is one of Europe's premier airports, the busiest single-runway airport in the world, and it was used by 35 million passengers last year.

"Gatwick has long been an important and valuable part of BAA and the decision to sell was not taken lightly. We believe that the airport's customers, staff and business will benefit from the earliest possible resolution of current uncertainty.

"When the Competition Commission published its provisional findings, we said that we would be realistic in our response, though we disagree with the Commission's report and the analysis on which it is founded.

"We will continue to present our case, in respect of the South East airports and those in Scotland. At Stansted, we believe that a change of ownership would interfere with the process of securing planning approval for a second runway, which remains a key feature of government air transport policy.

"The principal concern outlined by the Competition Commission in its report, published in August, was that common ownership of London's three main airports, including Gatwick, Heathrow and Stansted, was stifling competition and providing the traveller with a generally poor experience. It also concluded that BAA's effective monopoly was hindering the development of extra airport capacity in the South East, a view with which BAA strongly disagrees.

"The Commission itself states that a shortage of runway capacity in the South East is a main cause of poor service standards, but we believe its proposed remedies will delay delivery of that capacity," argued Matthews.

He continued: "BAA will continue to change in many respects. We have a new management team. Our priority is to improve the quality of service we offer passengers and airlines.

Matthews concluded: "Success depends not only on our day to day management of our airports, but also on policy-makers taking the right decisions on runway capacity and future regulation. Our response to the Competition Commission's report, and our announcement concerning Gatwick, is intended to focus our efforts accordingly."

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