Deals

BAA loses court hearing, faces forced airport sale

The UK airports operator will have to sell London-based Stansted airport and one of its airports in Scotland, after the group lost its case against the Competition Commission in the Court of Appeal. A BAA spokesperson said the group was disappointed and is seeking permission to make an appeal in the Supreme Court.

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BAA, the UK airports operator owned by Spanish infrastructure group Ferrovial, is required to sell Stansted airport in London and either Edinburgh or Glasgow airport in Scotland, after the group lost a hearing in the Court of Appeal brought by the Competition Commission.

“The effect of this decision is to restore in full our report together with its remedies including the requirement for BAA to sell Stansted and either Edinburgh or Glasgow airports, Gatwick having already been sold. Our intention now is to work with BAA to implement these measures in the interests of the travelling public,” said UK’s Competition Commission in a notification.

BAA, which operates Heathrow airport and has faced forced sales due to what was seen as a monopoly position in the UK airport sector, is seeking permission to appeal in the Supreme Court.

“We are disappointed that the Court of Appeal has upheld two of the five grounds argued by the Competition Commission,” a BAA spokesman said. “We note the court’s view that apparent bias in relation to a panel member existed during part of the commission’s investigation and will study the judgement carefully,” he added.

Airports: hard to keep on
BAA's books
Earlier this year BAA won an appeal against the Competition Commission when a judgement from the Competition Appeal Tribunal (CAT) ruled in BAA’s favour on the grounds that the Commission’s earlier decision was affected by “apparent bias” given that a member of its inquiry panel, Peter Moizer, had advisory links to Manchester Airport Group (MAG). MAG was a bidder for Gatwick airport, which BAA had been ordered to sell. Gatwick was subsequently sold to fund manager Global Infrastructure Partners (GIP).     

The Competition Commission appealed against this judgement on the grounds that it was wrong to conclude that there was a connection between Professor Moizer and Manchester Airports Group, giving rise to any kind of bias.

In related news, US infrastructure fund manager Highstar Capital is understood to be seeking an exit from its 25 percent stake in UK’s London City Airport, according to a report in Reuters. The stake was purchased from GIP in 2008. The reports suggests that the Highstar stake could fetch up to $317 million.