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BAA faces competition probe

30/03/2007

British airports operator BAA will face a full investigation from the Competition Commission (CC), the Office of Fair Trading (OFT) has confirmed.

The probe into BAA, whose major UK airports include Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton, will look into its suspected hold over the supply of services to Britain's airports.

Today's decision follows a three-month consultation period which took in over 60 responses after initial proposals to refer BAA last December.

"Having considered the points made by respondents to the consultation, the majority of whom supported referral, the OFT is of the view that the competition concerns it identified prior to the consultation exercise remain valid and that an investigation by the CC is now warranted," the OFT said in this morning's statement.

Critics have claimed the charges BAA imposes upon aircraft using its airports are too high.

But responding to today's announcement the Civil Aviation Authority (CAA), responsible for setting the ceiling for airport charge levels, insisted it was doing its job properly.

Harry Bush, CAA's economic regulation director, said the CAA considered it had "struck an appropriate balance in challenging BAA to continue to improve its operating efficiency and service quality".

"The CAA's proposals to increase the penalties for poor performance and to introduce rewards for improving performance are intended to sharpen further BAA's focus on the passenger," he added.

BAA's profitability was highlighted last July when it was bought for £10 billion by Spanish service sector firm Ferrovial.

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