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BAA expects forced airport sales | BAA expects forced airport sales |
(about 1 hour later) | |
The chairman of the UK's largest airports operator, BAA, has said he expects the Competition Commission to order the break up of the company. | The chairman of the UK's largest airports operator, BAA, has said he expects the Competition Commission to order the break up of the company. |
Sir Nigel Rudd told the BBC's Robert Peston in an exclusive interview that it was likely that BAA would be forced to sell some of its key airports. | Sir Nigel Rudd told the BBC's Robert Peston in an exclusive interview that it was likely that BAA would be forced to sell some of its key airports. |
But he argued that such a decision would not lead to effective competition against BAA's prime airport Heathrow. | But he argued that such a decision would not lead to effective competition against BAA's prime airport Heathrow. |
BAA has come under fire for poor service and excessive airline charges. | BAA has come under fire for poor service and excessive airline charges. |
The firm owns Heathrow, Gatwick, Stansted, Edinburgh, Glasgow, Southampton and Aberdeen airports. | The firm owns Heathrow, Gatwick, Stansted, Edinburgh, Glasgow, Southampton and Aberdeen airports. |
With a near monopoly on airports in the South East of England and in Scotland, there have been concerns that BAA - which is saddled with debt from its purchase by Spanish property group Ferrovial in 2006 - can only focus on one development project at a time, causing capacity problems. | With a near monopoly on airports in the South East of England and in Scotland, there have been concerns that BAA - which is saddled with debt from its purchase by Spanish property group Ferrovial in 2006 - can only focus on one development project at a time, causing capacity problems. |
Robert Peston's blog | |
This prompted an inquiry by the Competition Commission, which is expected to announce its provisional findings next week. | This prompted an inquiry by the Competition Commission, which is expected to announce its provisional findings next week. |
Airport sale | Airport sale |
Speculation is mounting that the regulator will conclude that BAA's ownership of seven UK airports is not in the public interest. | Speculation is mounting that the regulator will conclude that BAA's ownership of seven UK airports is not in the public interest. |
"[From] all the things that I'm hearing, it looks like they will announce that," conceded Sir Nigel. | "[From] all the things that I'm hearing, it looks like they will announce that," conceded Sir Nigel. |
This could force BAA to sell either or both London's Gatwick and Stansted airports and also Edinburgh or Glasgow airport. | This could force BAA to sell either or both London's Gatwick and Stansted airports and also Edinburgh or Glasgow airport. |
But Sir Nigel said that the break-up of BAA would not be a "disaster". | But Sir Nigel said that the break-up of BAA would not be a "disaster". |
He said that BAA's owners have already "huge expressions of interest" from potential buyers of Gatwick and Stansted, though neither are currently for sale. | He said that BAA's owners have already "huge expressions of interest" from potential buyers of Gatwick and Stansted, though neither are currently for sale. |
And he is confident that the downturn in the airline industry due to rocketing fuel costs and tightening household budgets, has not depressed in a serious way what Ferrovial and its partners would receive from a sale. | And he is confident that the downturn in the airline industry due to rocketing fuel costs and tightening household budgets, has not depressed in a serious way what Ferrovial and its partners would receive from a sale. |
International hubs | International hubs |
Yet even though the Heathrow proprietors could cope with the disposal of these airports, the BAA chairman disputes the claims that a sale would increase competition between the airports due to Heathrow's prime location. | Yet even though the Heathrow proprietors could cope with the disposal of these airports, the BAA chairman disputes the claims that a sale would increase competition between the airports due to Heathrow's prime location. |
Sir Nigel said: "Heathrow does not compete with Gatwick and does not compete with Stansted or Luton or Manchester. | Sir Nigel said: "Heathrow does not compete with Gatwick and does not compete with Stansted or Luton or Manchester. |
"It competes with Charles de Gaulle [in Paris], Dubai now and [Amsterdam's] Schiphol, because these are big international hub airports so the ownership of the airports has nothing to do with competition." | "It competes with Charles de Gaulle [in Paris], Dubai now and [Amsterdam's] Schiphol, because these are big international hub airports so the ownership of the airports has nothing to do with competition." |
In fact, he says fulfilling the requirements set out in the government's 2003 aviation White Paper will make it more difficult if the airports were under different ownership. | In fact, he says fulfilling the requirements set out in the government's 2003 aviation White Paper will make it more difficult if the airports were under different ownership. |
The full interview will be broadcast on Saturday, 16 August, and on Sunday, 17 August, at 2230 BST in Leading Questions on the BBC News Channel. | The full interview will be broadcast on Saturday, 16 August, and on Sunday, 17 August, at 2230 BST in Leading Questions on the BBC News Channel. |