Airports' fate in balance as owner mulls sell-off order

The fate of one of Scotland's two largest airports remained in the balance last night after the British Airports Authority said it may seek a judicial review into the competition watchdog's ruling it must sell Stansted.

In a final ruling confirming its provisional report from March, the Competition Commission told BAA it must sell either Glasgow or Edinburgh airports, along with Stansted. It is thought Glasgow is more likely to be sold as it underperforms Edinburgh.

However, BAA, which is understood to privately accept it will have to offload one of the Scottish airports, reacted by saying it would consider requesting a judicial review.

That would prolong a legal wrangle that has continued since a commission investigation concluded three years ago that the sales were necessary to address "competition problems" that had "adverse consequences for passengers and airlines".

That report also called for BAA to relinquish Gatwick, which it sold in 2009. BAA also owns Heathrow, Aberdeen and Southampton airports.

The firm is thought more likely to sell Glasgow than Edinburgh because of its poorer growth prospects and less convenient location, and the impact of competition from Prestwick.

However, Edinburgh could be favoured if Spanish-owned BAA needs to maximise sale proceeds to cut its debts. It is thought the Scottish airport sale may take place towards the end of next year, after any sale of Stansted.

The commission said the sale process should start within three months "or sooner if undertakings are accepted from BAA in the meantime".

It said passengers and airlines would still benefit from greater competition with the airports under separate ownership, despite the UK government's decision to rule out new runways at any of the London airports, such as Heathrow.

Peter Freeman, the CC's chairman of the BAA remedies implementation group, said: "We hope the sales can now proceed without delay so that passengers and airlines can start to enjoy the benefits of greater competition.

"Our report has been challenged, reviewed and upheld and it is clear the original decision to require BAA to divest three airports (including Gatwick) remains the right one for customers.

"There has also been no cause to alter our view on the need for either Edinburgh or Glasgow to be under separate ownership."

However, BAA chief executive Colin Matthews said: "This decision would damage our company, which is investing strongly in UK jobs and growth. We have a responsibility to protect our shareholders' investment and will now consider a judicial review of the decision."

EasyJet, Scotland's largest airline, backed the sell-offs. UK director Paul Simmons said: "The sale of airports should encourage more-timely, well-designed and cost-effective investment, which will improve service quality and lower charges."Duncan Gillespie, competition expert at law firm DLA Piper, said it was an "open question" as to whether airport sales would benefit consumers. He said while security queues had been cut at Gatwick, its new owners had raised charges to airlines.

The Scottish Chambers of Commerce warned that new ownership "will not in itself result in a better deal for Scottish air travellers".