Commission urges BAA to sell off either Edinburgh or Glasgow airport

ONE of Scotland's two busiest airports could be sold after competition chiefs today recommended that BAA lose control of either Glasgow or Edinburgh airport.

The Competition Commission (CC) said there were competition problems at each of BAA's seven UK airports "with adverse consequences for passengers and airlines".

It recommended that Spanish-owned BAA cease running either Edinburgh or Glasgow airport as well as two of its three London airports – Heathrow, Gatwick and Stansted.

The commission said it did not expect to require the sale of either Aberdeen or Southampton airports.

BAA Scotland described the CC's evidence as "flawed and said it was "disappointed" at the findings.

The CC will now consult to see which airports need to be sold.

The commission said there were "significant competition problems" arising from BAA's common ownership of the seven airports.

These included lower levels and quality of service for both airlines and passengers and investment that is not tailored to the requirements of airport users.

Christopher Clarke, chairman of the CC's BAA airports inquiry group, said: "While we accept that constraints on runway capacity in the south east will limit the scope for the benefits of competition in the short-term, we believe that separate owners would be more active than BAA in exploiting existing opportunities.

"In Scotland, where there are no similar capacity constraints, we believe separate owners of Edinburgh and Glasgow would similarly improve their offerings.

He added: "In Scotland, BAA has until recently been noticeably slow to develop new routes at Glasgow and Edinburgh, while at Aberdeen, its investment plans are regarded as unambitious despite relatively high levels of profitability."

The report found that common ownership of Edinburgh and Glasgow airports prevents competition between them.

It found that Aberdeen's strong local monopoly position would not be solved by divestiture so suggested investigating what other measures might be appropriate, such as more regulation.

BAA Scotland said it believed BAA's stewardship of Aberdeen, Edinburgh and Glasgow airports had served Scotland well.

Gordon Dewar of BAA Scotland said, "We remain of the view that Glasgow and Edinburgh airports serve separate markets and that competition between the two is highly unlikely, regardless of ownership.

"This is a view shared by many of Scotland's leading business organisations and is based on detailed and robust evidence.

"We are also surprised by the suggestion that a greater level of regulation may be required at Aberdeen Airport, recently named the world's most improved airport, but the Commission does not suggest this change for any other airport."

He said the CC's recommendations could have "serious implications" for a number of other Scottish airports.

Labour transport spokesman Des McNulty said: "If Glasgow or Edinburgh Airport is to be sold by BAA, any potential buyer must show a strong commitment to continued investment.

"It is essential that we safeguard jobs and protect the interests of passengers."

"We all have an interest in continued growth at both airports because the success of Scottish economy depends on strong transport links to the rest of the UK and Europe.

"This is particularly important as we prepare to welcome visitors from all over the world for the Commonwealth Games in 2014."

Ron Hewitt, chief executive of Edinburgh Chamber of Commerce, said he was dismayed at the report.

He said: "As far as I can see the Competition Commission have completely misread the situation in Scotland, which is a distinct market from England.

"Glasgow and Edinburgh airports really serve separate markets and all the research bears this out.

"The concern of business is that the proposals in the preliminary findings completely pull the rug out from under the feet of some of our most important assets for international trade.

"BAA's investment of over £500 million, £40 million in Edinburgh alone this year, cannot be guaranteed from an enforced sale."

He also said he could not understand why the commission have suggested that there could be a need for greater regulation at Aberdeen.

He added: "My dismay at this report leaves me with one singular conjecture – the Competition Commission cannot have even read the business community's evidence, which was universally in favour of supporting BAA's dedication to improved air services for Scotland and their fantastic financial commitment to making that happen."

He said the Chamber of Commerce would "fight this unwarranted interference tooth and nail."