BAA appeals Stansted sale

The Ferrovial-owned airports operator believes the UK’s Competition Commission has failed to adequately appreciate whether there have been ‘material changes of circumstances’ since its 2009 ruling that it sell the London airport.

BAA, the UK airports operator owned by Spanish infrastructure group Ferrovial, has lodged another appeal against the UK Competition Commission’s (CC) decision that it sell London’s Stansted Airport.

“The challenge relates to the Competition Commission’s consideration of whether there have been material changes of circumstances since its original 2009 decision such that it is not necessary or appropriate to require BAA to divest Stansted,” the airports operator said in a written statement.

Earlier this year, the watchdog reiterated that its decision to force BAA to sell Stansted and one of its Scottish airports was “fully justified”, adding that there haven’t been “any material changes in circumstances since it published its final report on BAA in March 2009”. Peter Freeman, the watchdog’s chairman, said at the time: “If anything, the case has been strengthened as the conditions for airport sales have improved slightly since we originally decided to require them.”

When the CC issued its final ruling in July, BAA argued that the “world has changed” since 2009. Namely: the government’s decision to rule out new runway capacity in south-east England and the sale of Gatwick Airport represent “significant changes”;  the airports in question “face increased competition from non-BAA airports” for the business of low-cost carriers that take a pan-European view; and it is “clearer than ever” that Heathrow [which is also owned by BAA] and Stansted serve different markets. 

In a strongly worded press release, Ryanair, the self-styled “UK’s favourite airline” dismissed BAA’s appeal as “yet another legal delay to the sale of Stansted, which has been repeatedly delayed by Ferrovial/BAA’s legal manoeuvrings”.

A Ryanair spokesman said in a statement that “Stansted airlines and passengers will continue to be overcharged for at least another 12 months by the Ferrovial/BAA monopoly, as they use this judicial review to delay the inevitable sale of Stansted”. 

Accusing BAA of continuing “to run rings around the [CC’s] regulatory regime”, the spokesman went on to state that “BAA have inflated the RAB (Regulated Asset Base) at Stansted by more than £200 million (€229 million; $316 million), being the cost of the now abandoned second runway and Stansted’s operating costs are inflated annually by more than £50 million of unexplained and unjustified intra-group charges to fund Ferrovial’s acquisition of the BAA airport monopoly”.

In addition to Stansted, Edinburgh and Glasgow airports, BAA also operates Heathrow, Southampton and Aberdeen airports in the UK. As part of the CC’s original decision, it was forced to sell Gatwick Airport, acquired by New York-based fund manager Global Infrastructure Partners in late 2009 for £1.5 billion.