Commission summarises BAA investigation

The Competition Commission announced that its study into the market domination of airport operator BAA will centre around the firm’s level of customer service.

The CC said it was aware BAA has faced extensive criticisms, especially over Heathrow, Gatwick and Stansted, it maintained an open mind at this stage.

BAA was referred to the commission by the Office of Fair Trading in March, amid calls for BAA to be broken up.

BAA says lack of capacity is the issue, not its ownership of seven UK airports.

“BAA accepts that the experience of too many passengers using London airports is unsatisfactory,” said the firm.

“But the problems of congestion and delay which affect passengers have their roots in lack of terminal and runway capacity, not the ownership structure of BAA.”

“At this stage, we have no preconceived ideas of what our conclusions might be; and if we were to identify competition problems, what the appropriate remedies might be,” the commission said in a statement.

The commission said it would look into if BAA’s market domination affected its willingness to both invest in, develop and operate its airports.

Particularly, it said it would look at BAA’s levels of customer service, “including recently, and most notably, security”.

But the commission said it would also look at the wider impact of restrictions on airport development and constraints on capacity in terms of runways, terminals and other facilities due to planning difficulties or other reasons.

BAA also attracted criticism for seeking and gaining a legal injunction to ban some green activists from protesting at Heathrow over climate change.

British Airways said it would like to see the commission call for Heathrow and Stansted to have separate owners.

“Common ownership is the root cause of the failure to expand Heathrow’s runway capacity,” said British Airways chief executive Willie Walsh.

“There is huge unsatisfied demand for extra runway capacity at Heathrow from customers and airlines and less demand at Stansted.”

The commission must make its final report by March 2009, but is expected to publish its preliminary findings in summer 2008, with the full report following by the end of that year.

It is also looking at the level of charges that BAA is allowed to impose on airlines for using its airports, with the report on this issue due by the end of September this year.

BAA has a 60% market share of all UK passenger flights, rising to 90% in the south of England.

In addition to Heathrow, Stansted and Gatwick, it owns Glasgow, Edinburgh, Aberdeen and Southampton airports.

BAA was bought in 2006 by Spanish giant Ferrovial.