We'll fight order to sell Scots airport, pledges BAA

Published on Thursday 19 March 2009 21:02

BAA is likely to appeal against the compulsory sale of either Edinburgh or Glasgow airport as ordered by the Competition Commission yesterday.

In its final report into the airport operator, Britain's competition watchdog said the company's near monopoly in Scotland must come to an end within two years.

However, BAA, told The Scotsman the recommendation was "impractical, if not unrealistic" during a recession, and has signalled its intention to explore a "number of routes of appeal".

The firm said it had not decided yet which airport to offload, if it was forced to sell one.

The commission's findings rule that Gatwick and Stansted must also be sold, followed by either Edinburgh or Glasgow. BAA has also been told to improve consultation with airlines at Aberdeen Airport.

The commission considered that "competitive constraints" on Glasgow would be significantly stronger if it was under separate ownership from Edinburgh.

Gordon Dewar, managing director of Edinburgh Airport, said BAA was "disappointed" with the report's findings, pointing out that there has been a significant economic shift in the last two years.

He said: "We fundamentally disagree with the findings of the commission. I think we have demonstrated clear evidence the two airports serve distinct and separate markets and that they will never compete, regardless of separate ownership.

"We continue to believe that the commission's analysis of the Scottish airports market is misguided and its remedies may not be practical in current economic conditions."

Mr Dewar added that BAA had two months to lodge an appeal.

Christopher Clarke, the commission's chairman, said it had reached its decision because there was "no competition" between Glasgow and Edinburgh.

"Edinburgh is regarded by passengers as the nearest substitute for Glasgow, and Glasgow is regarded as the nearest substitute for Edinburgh," he explained.

Mr Clarke added that the sale of one of the airports would benefit passengers, leading to better investment and productivity.

Airlines welcomed the decision, with Ryanair claiming BAA had for too long ignored travellers' needs and provided "inefficient, gold-plated and overly expensive facilities."

The SNP said the commission's recommendation would at last introduce "real competition" to Scotland's three lowland airports (which also include separately-owned Prestwick]."

However, both the Scottish and Edinburgh chambers of commerce warned the economic climate would make any sale "extremely difficult", and said customer service at the airports must not suffer.

The Unite union said the report "cast a shadow of uncertainty" over Scottish aviation workers, warning of possible job losses and changes to terms and conditions.

John Strickland, an airline industry analyst, said Glasgow was the likelier of the two airports to be put up for sale, as it is less profitable. He said Edinburgh remained a "jewel in the crown" for airlines as it attracted more business passengers.