BAA Forced to sell two London airports

The Competition Commission signaled the break up of BAA when it called for the company to be forced to sell off three of its seven airports, including two in London .

In a provisional report the commission said it had found competition problems at all seven of BAA's airports, adding that these could best be tackled by the sale of two from Heathrow, Gatwick and Stansted as well as either Glasgow or Edinburgh.

Though the commission put much of the blame for the competition problems on BAA's common ownership of the seven airports, it said the regulatory regime needed to be modernised and called on the government to review its 2003 white paper on airports and air travel in the light of its proposed ownership changes.

Trade unions representing airport workers expressed concern about the commission's proposals. Unite national secretary, Steve Turner, said: "Any attempt to break up BAA will be resisted. This union and our members will not sit back while the market plays games with their jobs and their terms and conditions of employment."

Response from airlines was mixed. Ryanair's director of legal and regulatory affairs, Jim Callaghan, said the low-cost carrier was fully behind the report's conclusions.Others were more cautious. EasyJet chief executive, Andy Harrison, praised the report as honest and unbiased. "They have said what everyone knows, that our airports aren't working, and that BAA and regulation aren't working." However he added: "Let's not kid ourselves into thinking that the break-up of BAA will automatically result in a better deal for the travelling public. Simply selling a monopoly airport from one greedy, highly indebted capitalist to another will benefit no one apart from the dealmakers in the City."

Commenting on the Competition Commission's recommendation that BAA sells some of its airports, Director General of the British Chambers of Commerce, David Frost, said:

"We're supportive of measures which aim to improve the passenger experience. Businesses are heavily reliant on air travel and at present they are not receiving the level of service required. Increasing competition in the market is a key tool in improving this situation.

"However, we must not lose sight of the need to maintain Heathrow as a global hub. The Commission's proposals must be considered in tandem with essential expansion at Heathrow.

"It is also vital that the Planning Bill is successfully implemented. Without planning reform and the creation of the Independent Planning Commission, any potential new operator of the UK 's airports will be constrained in their attempts to add capacity and quality."