Watchdog could call time on BAA monopoly in South East

19.4.2008   (Times)

The Competition Commission will publish on Tuesday(22nd April)  its initial findings
into whether BAA, the airports operator, should be broken up.

The long-awaited report could spell the end of BAA’s monopoly control in the
South East and potentially lead to a sale of Heathrow, Gatwick or Stansted.

The commission is expected to outline its "emerging thinking" next week.  Provisional
recommendations are due in August.

However, if next week’s report hints at a break-up, BAA may decide to act before
its hand is forced and begin an auction for one of its airports.



Airlines, including British Airways, bmi and Virgin Atlantic, criticised BAA’s
monopoly in submissions to the commission, claiming that it had led to poor service
for passengers.

BA is thought to want the commission to force the sale of Stansted.   Virgin and
bmi have proposed that Gatwick should be sold.

Virgin has also pushed for the sale of individual terminals at Heathrow to boost
competition at Britain’s busiest airport.

London First, the business lobby group, said that the main problem was not the
monopoly ownership of airports but inadequate regulation.

Baroness Valentine, chief executive of London First, said that airport regulation
had been designed in the 1980s and was no longer fit for purpose. "In adjudicating
the relationship between airport operator and airline, regulation has left the
passenger on the tarmac," she said. "Passenger-centred regulation is the 21st-century

Meanwhile, British Airways has dropped its last long-haul flight from a regional
airport as it concentrates its international efforts on the South East of England.

The cancellation of the service between Manchester and New York has angered business
people and politicians, with one dismissing the carrier as "London Airways, not
British Airways".

BA has scaled back its international and European operations from regional airports,
such as Manchester and Glasgow, in favour of more profitable long-haul routes
from Heathrow and Gatwick.

The decision to drop Manchester comes as BA is planning to take advantage of
new Open Skies rules by operating services to New York from European cities such
as Paris and Amsterdam.

(see     BA abandons long-haul flights from Manchester       Times   19.4.2008)

The Manchester service will end in October and will be transferred to Gatwick.
Aviation sources said that the flight had been losing money for some time, but
the decision has still angered Mancunians.

One politician in the city, who declined to be named, said: "BA is only interested
in taking care of its interests, not national interests."

Richard Critchley, the transport policy manager of the Greater Manchester Chamber
of Commerce, said: "It is disappointing to lose the national flag carrier and
it is damaging to the city. But there are other carriers offering that service
and BA’s decision is not a reflection on the economic vibrancy of Manchester."

Virgin Atlantic, bmi, Delta, Continental and US Airways all offer services from
Manchester to the United States and plan to continue their flights.  Emirates,
Etihad and Qatar connect Manchester with the Middle East and Singapore Airlines
flies to Asia.