Airlines welcome Competition Commission report on BAA

Airlines greeted a Competition Commission report that appears to herald the break up of airport operator BAA with enthusiasm.

However, uncertainty about the ownership of Heathrow, Gatwick and Stansted may hinder resolution of problems at the airports.

Analysts suggest BAA may seek buyers for Gatwick and one of its airports in Scotland – Glasgow, Edinburgh or Aberdeen.

The Competition Commission has yet to make any recommendations. But its interim report published on Monday expressed concern at BAA’s “apparent lack of responsiveness to the needs of airline customers and passengers”.

Commission chairman Christopher Clarke admitted it is “difficult to know” how airport ownership would look following a break-up. Some airlines have called for terminals within airports to be operated by separate companies.

The uncertainty could drag on for some time, with the commission only due to publish provisional findings in August.

In the meantime, BAA parent Ferrovial may rein in investment in businesses it might no longer control after paying £10.3 billion for the airports in 2006.

Competition lawyer Ian Giles, of Norton Rose LLP, warned: “Unbundling the long-term contracts BAA has entered will be complex and difficult, as well getting value for the BAA assets to be sold.”

When BAA was privatised in 1987 the Tory government of the time rejected demands for its break up on the grounds that this would hinder investment.

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