BAA wins Competition Commission appeal on airports sale
BAA has won its appeal against an order to sell three of the seven UK airports it runs on the grounds that the ruling panel was affected by "apparent bias".
But the appeal tribunal rejected BAA's argument that it was being forced to sell the airports too quickly.
The Competition Commission had ruled in March that BAA must sell Gatwick, Stansted and either Edinburgh or Glasgow airports within two years.
BAA has already sold Gatwick but the judgement will not affect that sale.
It is unclear whether BAA will have to sell the other airports in the original timeframe.
The Competition Appeal Tribunal said it would now allow more time to hear arguments from both sides as to what should happen next.
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 A fair-minded and informed observer would conclude that there was a real possibility
of bias affecting the deliberations, thinking and ultimate outcome of the investigation
Competition Appeal Tribunal's ruling |
BAA said it was pleased that the tribunal had upheld its appeal on the grounds of apparent bias and said further discussions should now take place with the Competition Commission as the tribunal suggested.
A spokesman for the commission said it was reviewing the ruling and was planning to make further submissions to the tribunal, adding that the judge had made the ruling with "the greatest reluctance".
Conflict
BAA had argued that there was a conflict of interest because of links between a member of the commission panel and an organisation interested in buying the airports.
BAA said that Professor Peter Moizer should not have been on the panel as he was a long-standing fee-paid adviser to to the Greater Manchester Pension Fund, which had links with Manchester Airport Group.
The fund is governed by the 10 local authorities of Greater Manchester, which own all of the shares in Manchester Airport Group (MAG).
MAG is a potential buyer for the airports BAA was told to sell, and it participated in the commission's investigation.
"A fair-minded and informed observer would conclude that there was a real possibility of bias affecting the deliberations, thinking and ultimate outcome of the investigation," the tribunal said in its judgement.
In making its ruling earlier in the year, the commission decided that the lack of competition in the south-east of England, where BAA also operates Heathrow, and in lowland Scotland was bad for passengers and airlines.
BAA will find out this morning whether it is to be forced to sell off Stansted and one of its Scottish airports in line with a contested Competition Commission ruling.
The monopoly watchdog's decision in March concluded that BAA's eight airports constituted a dominant market position and stipulated the Ferrovial-owned group must sell Gatwick and Stansted if it wanted to hang on to Heathrow, and also either Edinburgh or Glasgow.
Gatwick was already up for sale by the time of the ruling, and was subsequently acquired by Global Infrastructure Partners, which operates London's City airport, for £1.5bn in October.
But BAA launched an appeal against any further forced sales. The group claims that the original ruling was riven with "apparent bias" because a member of the inquiry panel was also advising Manchester Airports Group, which was a potential bidder for Gatwick. BAA also says that the two-year deadline on the divestments is unfair because the recession is dragging down prices.
BAA must scrap runway plans now rather than prolong the blight
21.12.2009 (Stop Stansted Expansion press release)
Stop Stansted Expansion (SSE) has called on BAA to withdraw its second runway plans as issues over the future ownership of Stansted Airport threaten to drag on for years, prolonging the blight and uncertainty for the local community.
The call comes in the wake of today’s Competition Appeal Tribunal (CAT) ruling which upheld one of the grounds of BAA’s appeal relating to apparent bias on the part of the Competition Commission in reaching its decision that BAA must sell three of its airports, including Stansted. The CAT was at pains to emphasise that there was no suggestion of actual bias by the Competition Commission but that it had to abide by the maxim that justice must not only be done but be seen to be done.
The CAT ruled against BAA’s second ground of appeal, namely, that the timetable laid down by the Competition Commission for the sale of the three airports was too short. The CAT considered there was no merit in BAA’s arguments on this point.
In terms of the way forward the CAT has said it is for the Competition Commission and BAA to agree this but that if no agreement can be reached the CAT will hear further arguments from both sides before making a decision. One distinct possibility is that the whole Competition Commission inquiry into BAA’s monopoly would have to be re-run, a process which could take two years.
It remains to be seen how the Government will decide to deal with the second runway public inquiry having previously put this on hold until the uncertainty about the future ownership of Stansted was resolved.
SSE Campaign Director Carol Barbone commented: “Today’s ruling has the potential to blight this local community for many more years despite the fact that the case for a second Stansted runway is dead in the water. BAA should face up to this now and end the uncertainty by announcing the cancellation of its second runway plans.”
ENDS
NOTE TO EDITORS
The Competition Appeal Tribunal judgment is available online.
See http://www.catribunal.org.uk/238-5051/Judgment.html
(21st December 2009)
Copyright AirportWatch, 2004