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UK airports operator BAA 'should be broken up', MPs say

15/03/2008

Passengers and airlines would benefit if airports operator BAA's control over many of Britain's airport is ended, MPs have concluded.

A report published today by the Commons' transport committee rejects BAA's position it is best-placed to deliver much-needed additional capacity to Britain's passenger aviation sector.

It says the drawbacks of having the same operator for London's Heathrow, Gatwick and Stansted "outweigh the disadvantages"

"There is much to be gained from a state of affairs where BAA did not enjoy such substantial market power," the report concludes.

"The extent to which BAA needs chivvying along by the regulator reflects poorly on their avowed commitment to service quality."

In particular long queues following increased security levels should have been avoided, MPs say, arguing BAA should have "predicted the predictable".

Terminal 5, opened yesterday by the Queen, is supported by the transport committee because it will add capacity to Heathrow.

But BAA's common ownership of London's airports is not helping resolve the "chronic shortage of capacity", committee chairman Gwyneth Dunwoody believes.

"BAA airports account for such a large proportion of air travel, and the company’s future is of central importance to the United Kingdom’s transport infrastructure," she said.

"Ending BAA's common ownership will encourage airports to compete for traffic."

The Competition Commission is currently conducting an investigation into BAA. It is expected to issue its final report next year.

Civil aviation union Unite is opposed to the transport committee's findings. Its national secretary Steve Turner predicted unrest if BAA is broken up.

"Breaking up the seven airports would undermine the investment needed to improve services and kick-start a 'race to the bottom' on labour costs," he said.

"We have already seen industry pressures on ground handling staff pay as the low cost operators try to squeeze every last penny out. Smashing the BAA operations would, in our view, just accelerate that process. That would be unacceptable."

BAA was originally established as the British Airports Authority in 1966 and was privatised in 1987. It accounted for 85 per cent of all aviation movements in the London area in 2006, and, as the report notes, is "therefore of central importance to the UK's transport infrastructure".