BAA told to speed up sale of one of its Scots airport

Published on Friday 7 October 2011 22:02

AIRPORTS owner BAA will have to decide within weeks whether to sell Edinburgh or Glasgow after the Competition Commission yesterday signalled an end to the five-year saga.

The watchdog’s move came after BAA, majority owned by Spanish infrastructure group Ferrovial, confirmed it was no longer challenging its order to sell one of the two Scottish airports.

BAA last month said it would seek a judicial review of the UK competition authority’s ruling requiring it to sell off Stansted and either Edinburgh or Glasgow. The commission said yesterday that the sale of one of the two Scottish airports should now not have to wait for a final ruling over the sale of Stansted, which BAA is still contesting.

Although the commission had originally told BAA to dispose of Stansted first, it said it would be “in the interests of affected passengers and airlines” to proceed with the sale of either Glasgow or Edinburgh airport ahead of the Essex airport.

BAA – which also owns Aberdeen airport as well as London Heathrow and Southampton – said it would announce which of the Central Belt airports it will sell shortly. A decision is expected this month and a sale could be completed within a year.

It is thought that Edinburgh airport could command a price tag of between £700 million and £1 billion, and Glasgow up to £500m.

Laurie Price, head of aviation strategy at consultancy Mott McDonald, said he believed Glasgow was the more likely of the two to be sold.

“Edinburgh is in the ascendency and does not have competition from Prestwick siphoning off traffic,” he argued.

Aviation analyst John Strickland of JLS Consulting, said: “Edinburgh is still on a roll and rapidly developing traffic, but Glasgow is putting up a good fight.

“Getting a good price for Edinburgh is the more likely option if there is a financial imperative, but BAA may well take the strategic option of holding on to the strongest airport in Scotland as well as that in England [Heathrow].”

Strickland said the benefits of a sale could include better passenger service and a “real quickening of pace” over developing new routes. One industry source also said BAA may even put both airports up for sale to assess levels of interest.

BAA’s chief executive Colin Matthews commented: “Both Edinburgh and Glasgow are great airports with great futures and we will be sorry to see one of them leave BAA.”

He said the company would continue with its judicial review proceedings against the Competition Commission’s decision requiring BAA to sell Stansted.

Gatwick has already been sold but the airport operator believes being forced to sell the other airports is unfair because the prevailing economic conditions means they will not fetch a fair price and because the airports market in the south east of England has changed.

“It is clearer now than it has ever been that Heathrow and Stansted serve different markets,” said Matthews.

The long-running saga began more than five years ago, in June 2006, with the launch of a study into BAA’s dominance of the UK airports market by the Office of Fair Trading (OFT).

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