Airports break-up "good" for air cargo

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Proposals by the Competition Commission to break up BAA, have been welcomed by the British International Freight Association.

A preliminary report by the commission has recommended that BAA should sell two of its three London airports and another in Scotland. BIFA reckons that improved competition in the market would result in increased efficiency and more flexible operating conditions in the air cargo market.

BAA built up its dominant position in London as a state-owned company, but is now owned by Spanish group Ferrovial.

BIFA Director General Peter Quantrill said: “BAA has played an important role in the development of airport infrastructure in the UK but times have changed and it is no longer viable for it to maintain such a dominant position in the marketplace.

“While the report addresses passenger service efficiency and problems with capacity, particularly in the South East of England, it is important to remember that a substantial amount of freight is carried on passenger flights. If the findings of the report are implemented, we expect our members engaged in the transport of goods by air to benefit from the healthy competition, which we hope will lead to increased efficiency and more flexible operating conditions.”

In its preliminary findings, the CC said there were competition problems at each of BAA’s seven UK airports “with adverse consequences for passengers and airlines”. The final report is scheduled to be published in the first quarter of 2009.

BAA, not surprisingly, has criticised the commission’s findings.

Chief executive Colin Matthews said: “By calling not just for a fundamental restructure of BAA but also for a review of the government’s air transport white paper, the commission risks delaying the delivery of new runways and making better customer service less, not more, likely. We will be seeking urgent clarification from the government of how it believes this reports findings can be reconciled with the air transport policy it established in 2003 and its current review of economic regulation.

“We note however that this is not the end of the competition commission process and we will continue to point out to the commission the many areas where we believe its analysis is flawed and its remedies would be disproportionate and counterproductive.

“Just as the government is about to make the decisions that could lead to the first full-length runways being built in the south east since the second world war, the commission risks creating uncertainty, delay and confusion at exactly the wrong time.

“In Scotland, the commission has apparently ignored the evidence presented by BAA, and supported by numerous respected third party organisations, that clearly demonstrates that Edinburgh and Glasgow Airports serve separate markets and therefore do not and would not compete, regardless of ownership,” said Matthews.


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