The Competition Commission (CC) is preparing for a final push in forcing the break-up of airport regulator BAA (website: www.baa.com), The Financial Times reports.
Having criticised the group’s alleged monopoly of airports in Scotland and south-east England this April, the commission is now close to releasing details of a 16-month investigation.
Little is expected to have changed since the publication of its “emerging thinking” document, and many pundits predict the final report will spell the end of BAA’s dominant reign.
The Spanish-owned regulator currently operates several airports around the British Isles, including Heathrow, Gatwick, Stansted, Edinburgh, Glasgow and Aberdeen.
It has been accused by the CC of stifling competition between airports and airlines, allegedly leading to higher airfares; flight delays; underinvestment; and a lack of long-term planning
And with the commission’s final report now just days away, the aviation industry is gearing up for a hotly-contested debate over the future of its key economic assets.
Legal observers suggest that the most likely outcome of the CC report will be for BAA to sell just one of its London airports, along with one of its Scottish bases. In theory, however, the group could be ordered to relinquish itself of all three bases in the capital.
Quoting an unnamed insider, The Financial Times explained that an order to sell one of the gateways is the most likely outcome because the CC is not authorised to call for other potential solutions, such as tightened regulation or changes to planning laws.
“[Other remedies] in terms of ‘the regulatory regime should be something different’, or ‘planning should be something different’ – [those are] not within the commission’s power to deliver,” the source stated.
He added: “The commission historically has been very pragmatic.”
And yet while plans for possible reforms will be made public next week, analysts note that the CC still has seven months to decide on the formal details of any resolution.
This has given it time to invite the opinions of several companies in the sector – among them rival airport operators – leading to speculation that it is spying a total overhaul of the current economic regulation outlined in the Airports Act 1986.
Estimates vary over how much a facility such as Gatwick Airport could fetch if put up for auction, though The Telegraph said industry experts pegged the figure at around
