The future of BAA - fourth report of the session 2007-08 - report, together with formal minutes, oral and written evidence

BAA Limited (BAA) owns and operates seven of the UK's airports at Heathrow, Gatwick, Stansted, Southampton, Glasgow, Edinburgh and Aberdeen. Its dominant market position has for some time led to calls for it to be broken up, both by the airlines and the House of Commons Transport Committee. In response to a call for evidence, the House of Commons received written memoranda from 30 organisations and individuals. As well as BAA, the regulators, unions, airlines and the Department for Transport were invited to giveoral evidence. The British Airports Authority was established under the Airports Authority Act 1966, and was initially responsible for the airportsat Heathrow, Gatwick, Stansted and Prestwick. In the early 1970s, the authority acquired Edinburgh, Aberdeen and Glasgow airports. Twenty years after the first act, the Airports Act 1986 was passed, which turned the British Airways Authority into the holding company BAA plc. BAA was privatised in 1987, and over the course of the 1990s sold Prestwick and acquired Southampton airport. Figures from the Civil Aviation Authority show that BAA airports accounted for 53% of all commercial air transport movements nationally, and 85% of movements in the London area in 2006.The future of BAA istherefore of central importance to the United Kingdom’s transport infrastructure. In March 2006, BAA were approached by a consortium led by Ferrovial, an international construction group with a major interest in transportinfrastructure and a takeover subsequently occurred. BAA needs to refinance the debt that was placed on it by the acquisition and is expected to doso once the regulatory settlement is finalised in March 2008. Fourteen recommendations were made by the Committee. The continuing demand for capacity at our airports raises important questions about the nature and extent of expansion. BAA’s position in the market means that what is good for aviation is usually good for BAA. BAA claim to be best placed to deliver new capacity. This has been their key argument in favour of retaining common ownership of Heathrow, Gatwick and Stansted.The Committee considers that the drawbacks of common ownership outweigh the advantages, and that there ismuch to be gained from a state of affairs where BAA did not enjoy such substantial market power. The extent to which BAA needs to be pushed by the regulator reflects poorly on their avowed commitment to service quality. Arguments from CAA denying the possibility of increased competition are notconsidered valid. It is hoped that the Competition Commission will take the steps necessary toûensure a healthy, competitive airports sector for the years to come. This report may be found at:


  • English

Media Info

  • Pagination: 175p

Subject/Index Terms

Filing Info

  • Accession Number: 01100156
  • Record Type: Publication
  • Source Agency: TRL
  • Files: ITRD
  • Created Date: May 27 2008 9:49AM