Competition chiefs check on bidders for Gatwick

17.3.2009   (Times)


The Competition Commission has begun to vet bidders for Gatwick to ensure that
they are suitable candidates to run the UK’s second-busiest airport.

The commission’s analysis comes as easyJet, the low-cost airline, begins a High
Court action today in an attempt to block price increases at the airport.

Gatwick was put up for sale last year and there are three consortiums still in
the running. These are: Global Infrastructure Partners, which owns London City
Airport; Lysander Investment Group, which includes Citigroup and Vancouver Airports;
and Manchester Airport Group in partnership with Borealis, a Canadian pension

The Competition Commission has set out criteria that potential new owners of
Gatwick must meet and it is assessing the worthiness of each contender. Any consortium
deemed to have insufficient funds or experience running an airport will be blocked
from submitting a final bid. Those bids are due by the end of April.

BAA, the airports operator, put Gatwick up for sale last year to pre-empt an
order from the Competition Commission to dispose of it. The commission is expected
to say on Thursday that BAA’s monopoly ownership of Heathrow, Gatwick and Stansted
has been bad for passengers and airlines. It is expected to demand the sale of
Gatwick, Stansted and either Edinburgh or Glasgow to introduce more competition
into the UK’s airport market.

The sale of Gatwick is likely to raise up to £1.8 billion. Hochtief AirPort,
3i Infrastructure and Babcock & Brown all pulled out of bidding.

Gatwick will be at the centre of a landmark legal challenge today over airport
charges imposed by the Civil Aviation Authority (CAA). At a four-day hearing in
the High Court in London, easyJet will accuse the aviation watchdog of failing
to follow due process by favouring BAA at the expense of commercial airlines in
pricing negotiations.

EasyJet sought the judicial review after the CAA increased charges from £5.61
per passenger to £6.79 per passenger in March last year. The charges will rise
to £7.34 plus inflation per passenger by 2013.

It is the first time that the CAA has been subject to a judicial review of airport
pricing and it could force the aviation watchdog to open a fresh round of talks.
Under normal circumstances pricing levels are set every five years.

A spokesman for the CAA said that it would defend its position "robustly". It
has hired Michael Beloff, QC, one of Britain’s highest-paid barristers and a former
president of Trinity College, Oxford, to argue its case. A ruling is expected
within eight weeks.