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BAA dismisses break up demands
Airports operator BAA has strongly rejected calls by airlines like British Airways and Ryanair for the company to be broken up.
The group, which runs the London airports of Heathrow, Gatwick and Stansted plus four others in the UK, argued that a more fragmented ownership structure would undermine investment in airport capacity.
Responding to an Office of Fair Trading study into UK airports, BAA chief executive Stephen Nelson said: “I fully understand why airlines like British Airways and Ryanair want to weaken airport operators and achieve greater control over prices and investment at the airports where they hold powerful positions themselves, but the job of the competition authorities is to protect the longer term interests of all consumers.
“The biggest problem facing UK air travellers is the shortage of airport capacity, expecially in South East England. Failure to build new runway capacity will lead to gridlock, disappointed customers and significant loss to the national economy.”
Nelson added: “Despite this, some airlines want to break up BAA and impose even heavier price regulation.
“This have-it-both-ways proposal would be a poisonous cocktail for consumers. It risks setting back the much needed investment programme which BAA is pursuing, to trasform London’s airports through projects like Heathrow Terminal 5, Heathrow East and the Stansted second runway.”
BAA claimed that the threat to investment from break-up would outweigh any possible benefits to consumers in terms of choice, price or quality of service.
Nelson said: “We are not saying that the current situation is perfect and we welcome the OFT’s review, so long as it is wide-ranging and evidence-based. The OFT needs to consider regulation as well as ownershp structures.
“The evidence suggest BAA has done a good job since privatisation, in terms of security and safety; capacity; quality of service and price.”
Report by Phil Davies
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