Heathrow State BAA takeover plans
passengers from the financial woes of operator BAA.
administration" regime if debt-laden BAA went bust.
The regime would require administrators to continue to operate Heathrow as an
airport while its financial affairs were sorted out.
It would also give Hoon and the Civil Aviation Authority a direct say in the
future ownership of the airport. Similar emergency powers are held for the rail
and water firms.
Ministers fear that in the normal insolvency regime receivers would have no duty
to continue services to passengers and could even decide to sell off parts of
the airport for housing or industrial use.
The new powers would also apply to Gatwick and Stansted, but Hoon appears particularly
concerned about the impact on the wider economy of financial problems at Heathrow.
A Department for Transport consultation paper states that closing Heathrow for
even a week would disrupt the travel plans of one million passengers.
It adds: "This would be potentially very damaging for those involved as trips
would have to be cancelled and business meetings missed."
Sources at BAA described the move as "unhelpful" and insisted that the company’s
financial position was sound.
The move is also opposed by the Civil Aviation Authority, which regulates airports,
but the DfT states: "On balance we take the view that the potential negative impacts
of the financial failure of a large airport, in particular Heathrow, would be
sufficiently large to warrant the introduction of special administration, providing
implementation costs are not excessive."
financing arrangements", as the prospect of State interference could put some
investors off.
BAA is being forced to sell Gatwick, Stansted and either Glasgow or Edinburgh
airports on competition grounds.
In the three months to March 31 the group posted a £316.2 million pre-tax loss
as passenger numbers slumped 10 %.
A spokesman for BAA said: "It is extremely unlikely that these special administration
powers would ever be required. Heathrow is a robust business and our financing
is secure."
BAA was bought by the Spanish company Ferrovial three years ago in a deal that
saddled it with debts of £9.5 billion.