Watchdog orders BAA to sell off Edinburgh airport

Published on Wednesday 17 December 2008 08:54

COMPETITION watchdogs today announced plans to order BAA to sell Edinburgh Airport to new owners.

The Competition Commission said having Edinburgh and Glasgow airports under different ownership would make them both more responsive to customers.

But the announcement sparked fears that the sale could attract a low-cost airport operator who would not invest in the same high standard of facilities.

The Competition Commission said that, subject to final consultation, it would require BAA to sell Gatwick and Stansted airports as well. It expects to publish its final report in February or March.

The commission had warned it wanted BAA to sell one of its two main Scottish airports to improve competition, but its decision to specify Edinburgh as the one to be sold came as a surprise.

Colin Matthews, chief executive of BAA, said: "The Commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership, and we believe there is no justification for specifying which of these airports should be sold. We will continue to make our case to the Competition Commission."

An aviation source said Edinburgh airport would sell for well over 1 billion.

Graham Birse, deputy chief executive of Edinburgh Chamber of Commerce, said he did not understand the logic of the commission's decision.

He said: "The competition issues are very different from those in London. Surely it would be for BAA to decide which of the airports it would prefer to dispose of."

And he said he thought BAA were more likely to have opted to sell Glasgow.

"The issue for the business community in Edinburgh is the maintenance of high quality of service, the attraction of direct routes and the improvement of infrastructure round the airport. BAA's performance has been quite impressive.

"But if you open it up to the highest bidder, a different type of owner might come along who operates a low-cost model with the airport simply providing facilities to airline at the lowest available cost."

Tom Buchanan, the city council's economic development convener,

said: "It's vital to the city, to the region and to the country that Edinburgh has an excellent international airport. In Scotland, Edinburgh has the most business traffic and is busiest by passenger volume, and we need that to continue for the health of our economy.

"We'll be examining the commission's findings in detail and working with our partners to make the strongest possible case for the continued growth and success of Edinburgh airport."

But Tom Dalrymple, chairman of Edinburgh-based airline flyglobespan welcomed the ruling.

He said: "There is no doubt that an element of competition had to be introduced.

"Latest BAA figures show over 20 million passengers a year pass through the three Scottish airports and you can understand why the Competition Commission believe that one company looking after the interests of so many people in such a relatively small geographical area might not be in everyone's best interest."