BAA considers judicial review of forced sales

Airports operator BAA says it will consider a judicial review against the final decision of the UK’s Competition Commission (CC) that it needs to sell London’s Stansted Airport plus one of its Scottish airports – a process that the CC says should start within three months.

In a report issued today, the UK’s Competition Commission (CC) has stood by its previous declaration that UK airports operator BAA must sell London’s Stansted Airport together with one of its Scottish airports – which means either Glasgow or Edinburgh.

The report said: “The CC has concluded that the sale of the airports is fully justified and that passengers and airlines would still benefit from greater competition with the airports under separate ownership, despite the current government’s decision to rule out new runways at any of the London airports.”

It added: “The sales process will start in three months’ time, or sooner if undertakings are accepted from BAA in the meantime.”

The decision comes after a two-year battle between BAA, which is owned by Spanish infrastructure company Ferrovial, and the CC. In 2009, the CC told BAA to sell Gatwick and Stansted airports as well as one of its Scottish airports. Gatwick was subsequently sold to US fund manager Global Infrastructure Partners for £1.5 billion (€1.7 billion; $2.4 billion) in late 2009.

However, BAA shows no signs of accepting the latest decision easily. In a statement following the release of the report, chief  executive Colin Matthews said in a statement: “We are dismayed that the CC’s final decision still requires BAA to sell Stansted and either Glasgow or Edinburgh airport…We have a responsibility to protect our shareholders’ investment and we will now consider a judicial review of the CC’s decision.”

BAA argues that “the world has changed” since the CC’s 2009 decision. 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.