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BAA must sell three airports, says Competition Commission

BAA will have to sell Gatwick and Stansted as well as either Edinburgh or Glasgow airports, the Competition Commission’s said today in its final report on the operator’s ownership of seven UK airports.

Competition Commission BAA Airports inquiry chairman Christopher Clarke said: “We have decided that the only way to address comprehensively the detriment to passengers and airlines from the complete absence of competition between BAA’s south-east airports and between Edinburgh and Glasgow is to require BAA to sell both Gatwick and Stansted as well as either Edinburgh or Glasgow.

“They will each then operate under separate ownership from BAA’s other airports. We recognise that in using our powers in this way, we will have a significant impact on BAA’s business. However, given the nature and scale of the competition problems we have found, we do not consider that alternative measures, such as the sale of only one of the London airports or greater regulation, will suffice.”

The Commission also stipulated that the sale must go ahead on all three airports within two years. They are to be sold in sequence, beginning with Gatwick, then Stansted, followed by either Edinburgh or Glasgow. The Gatwick sale was initiated by BAA in September last year.

It also said it is recommending that airport regulator the Civil Aviation Authority (CAA) should take action at Heathrow, the UK’s only hub airport, where BAA will continue to have substantial market power even after the sale of Gatwick and Stansted airport.

The Commission will also urge the government to improve the current airport regulatory system.

The final report said BAA’s seven airports have competition problems and takes into account evidence received from BAA, the airlines, the CAA and any other parties over almost two years. Its provisional findings were published in August 2008.

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