OFT proposes to refer BAA airports to the Competition Commission
The OFT has signalled its intention to refer the supply of airport services by BAA to the Competition Commission (CC) for more detailed investigation. It has also made a recommendation that the airports regulator advise the Government on the case for the de-regulation of Manchester airport.
BAA owns Heathrow, Gatwick, Stansted and Southampton in South East England, and Edinburgh, Glasgow and Aberdeen in Scotland. These airports have an annual turnover of £2 billion and handle over 60 per cent of all air passengers in the UK.
The OFT market study has found
- in the South East, BAA's airports handle ninety per cent of passenger trips, and these airports could under separate ownership compete to attract air passengers;
- evidence of poor customer satisfaction;
- significant investment at airports in the South East of England is planned. Without competition - investment could be inefficient - costly for air passengers and for the UK;
- BAA's Scottish airports which carry over 80 per cent of Scottish air passengers, are not price regulated, and charges to airlines are higher than Gatwick and Stansted;
- Glasgow, which faces some competition from Prestwick, has had the largest price decreases of BAA's airports in Scotland; and
- the study also found further evidence that competition between independently owned airports - such as Liverpool and Manchester - leads to improved value for air travellers.
The conclusion on referring BAA to the CC is provisional - the OFT now invites comments before reaching a final conclusion.
Frontier has been advising Manchester Airport during the course of the OFT's investigation.
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