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BAA ordered to sell Gatwick, Stansted and Edinburgh

The Competition Commission confirmed today that, subject to final consultation, it will require BAA to sell both Gatwick and Stansted airports as well as Edinburgh airport.

It also proposes to introduce measures to ensure that investment and levels of service at Heathrow, and possibly Gatwick and Stansted, meet more effectively the needs of airlines, passengers and other airport users. At Aberdeen airport, it is proposing measures to
promote investment linked to rebates on charges.

The Competition Commission (CC) also intends to make recommendations to the Government on a more effective, and ultimately more flexible, system of airport regulation and also on aspects of government
airports policy.

The CC has been looking into whether there are any features of the UK aviation market that prevent, restrict or distort competition since March 2007. On 20 August 2008, the CC published its provisional findings report, which found competition problems at each of BAA’s seven UK airports (Heathrow, Gatwick, Stansted and Southampton in England, and Edinburgh, Glasgow and Aberdeen in Scotland) It stated that a principal cause is their common ownership by BAA but that there are also competition problems arising from the planning system, aspects of Government policy and the system of regulation.

The CC will now consider responses to its provisional decision document published today at
www.competition-commission.org.uk. It expects to publish its final report on BAA’s seven
UK airports, and the appropriate remedies, in late February or early March 2009.

"As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity," said BAA chief executive Colin Matthews.

"In Scotland, the Commission has not provided any substantial evidence to support its view that Edinburgh and Glasgow would compete under separate ownership, and we believe there is no justification for specifying which of these airports should be sold. We will continue to make our case to the Competition Commission."

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