An end to BAA’s 'Heathrow hassle'?
There is now a “very real prospect” that BAA will be forced to sell off one or more of its seven UK airports, said the Competition Commission.
In an interim report, the commission highlighted a string of problems at BAA-run airports, including long security queues, poor infrastructure and insufficient capacity, that showed a chronic “lack of responsiveness” to passengers and airlines on the part of the operator. You can see why the term “Heathrow hassle” has found its way into the national lexicon, said Danny Fortson in The Independent.
Benefits of a break-up
“The case for breaking up BAA is compelling,” said The Times. Why should one company control over 60% of flights in and out of Britain? “Increased competition could bring immense benefits, just as it did to the telecoms and airline industries.” Research suggests that passengers are already prepared to switch between the three London airports on short haul and leisure flights, noted the FT, “so competing owners would have incentives to improve services to attract airlines and their customers”.
Moreover, different owners of London’s main airports would also provide more sources of investment and scope for concentrating on more than one major project at a time.
Given that Ferrovial is loaded with £17bn of debt from the July 2006 acquisition, it might well welcome being forced to sell an airport as a way “to reduce its debt to a more manageable level”, said David Robertson in The Times. Gatwick alone is valued at £2bn plus – and it may not stop there. In America, specific terminals are in competition with one another, never mind the airports, so “the scope for breaking the cartel operated by BAA is considerable”, said The Daily Telegraph. BAA may be forced to lose control over more than just an airport.
FER: 12m change –38
