BAA to sell two airports after losing court ruling

AIRPORT operator BAA is set to take its battle with the Competition Commission to the Supreme Court, after the regulator won a High Court ruling forcing it to sell off two more airports to satisfy competition concerns in the industry.

BAA’s Spanish owner Ferrovial will now have to sell off Stansted and either Glasgow or Edinburgh airports, a year after offloading Gatwick to the Global Infrastructure Partners (GIP) consortium for £1.51bn.

The news comes as the latest development in a long tussle between the firm and the Competition Commission, which produced its original report into BAA’s dominance of the UK’s major airports in March last year, recommending the sale of two more airports in addition to Gatwick.

BAA took the case to the Competition Appeal Tribunal (CAT), where its appeal was upheld on the grounds of “apparent bias” in the original report. The airport operator argued successfully that a member of the Commission’s advisory panel, Professor Peter Moizer, was potentially compromised, as he also acted as an adviser to the pension fund which owns Manchester Airport Group, a possible bidder for BAA’s assets.

But the appeal was overturned yesterday by Lord Justice Maurice Kay, who agreed with the Commission that Moizer’s connection was too remote to have materially influenced the outcome of the report.

BAA said it was “disappointed” by the decision and would seek permission to appeal to the Supreme Court.

Charles Stanley aviation analyst Douglas McNeill said the decision would be broadly welcomed by the airlines operating out of BAA’s airports. “There is a desire to see BAA’s dominance challenged, though many would argue that regulatory changes need to be introduced as well in order to prevent a national monopoly being replaced by several regional monopolies,” he said. “But by and large the airlines would welcome increased competition, as airport charges are such a large part of the cost base.”

Ryanair, which has slimmed down its operations at Stansted drastically in recent years, supported the Competition Commission in its case.

Chief executive Michael O’Leary said the Court of Appeal ruling was “a great result for competition, consumer choice and passengers”.