Transport Committee Press Notice

THE FUTURE OF BAA

BAA’s monopoly on UK airports is bad for passengers and bad for aviation, said the House of Commons Select Committee on Transport in its Report on the future of BAA, published today (Saturday 15 March 2008).

The Committee found that BAA’s common ownership of several major airports across the UK has stifled competition.

Commenting on the report, Chairman of the Committee the Hon Gwyneth Dunwoody MP said:

“There is room for more competition, especially between London airports. BAA airports account for such a large proportion of air travel, and the company’s future is of central importance to the United Kingdom’s transport infrastructure.

“Ending BAA’s common ownership will encourage airports to compete for traffic. The Committee firmly believes that increased competition is possible and could have huge benefits for both airlines and passengers.”

The Committee further warns that Heathrow is losing its popularity and found that added capacity at the west London site is required if Heathrow is to reverse this trend and retake its place as the European hub of choice for international carriers. Terminal 5 will benefit British Airways and passengers.

Mrs Dunwoody further commented:

“It is clear that a chronic shortage of capacity is hindering Heathrow’s ability to provide the sort of service to which it should aspire. That is why we support the Government’s proposal to add capacity to Heathrow. It is regrettable that BAA ever allowed the position to get so bad”

The Committee also said that BAA should have “predicted the predictable” and planned better for contingencies, such as strikes or terrorist incidents, which has led to the current situation with long queues in airports.

The Committee also recommends:

  • The role of the Competition Commission change from that of a body automatically involved in airport charges to one which the airport operators may go if they wish to appeal.
  • Economic regulation should be applied only where there is a need.
  • The Air Transport Users Council be given more funding to act as a proactive consumer body.

Finally, the Committee urged the Competition Commission to carry out a detailed cost-benefit analysis of all the possible outcomes.

Notes:

1. BAA is responsible for the airports at Heathrow, Gatwick, Stansted, Edinburgh, Aberdeen, Glasgow and Southampton, serving nearly 150 million passengers each year between them.

2. In 2006 BAA was bought by a consortium led by Ferrovial, an international construction group.

CAA figures show that BAA airports accounted for 53 per cent of all commercial air transport movements nationally and 85 per cent of movements in the London area in 2006.

SCA 24/2007-08                                     15 March 2008