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OFT proposes to refer BAA to Competition Commission
EasyJet has welcomed an Office of Fair Trading proposal to refer airports operator BAA to the Competition Commission.
An OFT market study found evidence of poor customer satisfaction at the BAA’s airports in the South East – Heathrow, Gatwick and Stansted. It also warned that without competition investment in South East airports could be inefficient and costly for air passengers.
OFT chief executive John Fingleton said: “We believe that the current market structure does not deliver best value for air travellers in the UK and that greater competition within the industry could bring significant benefits for passengers.
“There is evidence of poor quality and high charges – BAA’s investment plans, which are of great importance to the UK, have raised significant concerns aomng its customers.
“These are signs of a market not working well for consumers and we believe that a full inquiry into BAA’s structure is justified.”
An eight-week consultation process will end on February 8 before the OFT makes the referral to the Competition Commission.
The no-frills airline’s chief executive Andy Harrison said: “We welcome this, but the ownership of BAA it is not the biggest issue.
“What the OFT needs to look at is that all the BAA’s London airports are local monopolies which need much more stringent price regulation. Changing the ownership of BAA will not alter this fundamental structural problem.”
BAA, owned by Spanish consortium Ferrovial, owns seven UK airports with an annual turnover of £2 billion, handling 60% of all air passengers in the UK. Besides Heathrow, Gatwick, Stansted and Southampton, BAA owns Glasgow, Edinburgh and Aberdeen airports in Scotland.
The OFT has also recommended that the airports regulator advise the government on the case of the de-regulation of Manchester airport.
Report by Phil Davies
Phil Davies
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