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Competition watchdog to examine BAA dominance

09/08/2007

Britain's competition watchdog has confirmed that its study into the market dominance of the country's largest airports operator will examine levels of customer service and security provided by the company.

The Competition Commission said that it was "well aware" of concerns expressed over the operation of BAA's seven UK airports, particularly London's Heathrow, Stansted and Gatwick airports.

In a statement announcing the scope of its inquiry into BAA's business, the commission stressed that concerns included reported delays experienced by airline passengers going through security and immigration and questions about the availability of facilities such as lifts and escalators at airports run by the group.

Concerns about overcrowding had also been raised, regulators said.

Yesterday BAA confirmed that its UK airports handled a total of 15.1 million passengers in July, making it the company's busiest ever month.

But the airports operator is facing airline demands for its break-up, with the Office of Fair Trading (OFT) having also said that it suspects BAA's current structure is damaging market competition.

Outlining the terms of the Competition Commission's investigation into the company's market dominance, chair of the inquiry Christopher Clarke said today: "We are looking at how common ownership could affect BAA’s incentives both to invest in and develop its airports, and operate them."

But despite acknowledging that the commission had already collected "extensive evidence" from various parties over the issue, he warned that it was "much too early" to determine what regulators might conclude about BAA's existing structure.

"At this stage, we have no preconceived ideas of what our conclusions might be; and if we were to identify competition problems, what the appropriate remedies might be," said Mr Clarke.

Responding to the announcement BAA said it accepted that many if the issues identified by the commission had "complex and deep-seated causes that require careful consideration".

But the airports operator, which is currently seeking permission to boost runway capacity at Heathrow and Stansted, said that tackling overcrowding at its London airports required additional investment and not changes to its structure of ownership.

"BAA accepts that the experience of too many passengers using London airports is unsatisfactory," said BAA chief executive Stephen Nelson.

"But the problems of congestion and delay which affect passengers have their roots in lack of terminal and runway capacity, not the ownership structure of BAA."


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