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BAA 'should sell' Scots airport BAA 'should sell' Scots airport
(20 minutes later)
BAA should lose control of one of Scotland's busiest airports, according to the Competition Commission (CC).BAA should lose control of one of Scotland's busiest airports, according to the Competition Commission (CC).
The CC said there were competition problems at each of BAA's seven UK airports "with adverse consequences for passengers and airlines".The CC said there were competition problems at each of BAA's seven UK airports "with adverse consequences for passengers and airlines".
It recommended that BAA cease running either Edinburgh or Glasgow airport as well as two of its three in London.It recommended that BAA cease running either Edinburgh or Glasgow airport as well as two of its three in London.
BAA Scotland described the evidence as "flawed" and said it was "disappointed" at the findings.BAA Scotland described the evidence as "flawed" and said it was "disappointed" at the findings.
The commission said it did not expect to require the sale of either Aberdeen or Southampton airports.The commission said it did not expect to require the sale of either Aberdeen or Southampton airports.
The CC will now consult to see which airports need to be sold.The CC will now consult to see which airports need to be sold.
'More regulation''More regulation'
Christopher Clarke, chairman of the CC's BAA airports inquiry group, said: "While we accept that constraints on runway capacity in the south east will limit the scope for the benefits of competition in the short-term, we believe that separate owners would be more active than BAA in exploiting existing opportunities.Christopher Clarke, chairman of the CC's BAA airports inquiry group, said: "While we accept that constraints on runway capacity in the south east will limit the scope for the benefits of competition in the short-term, we believe that separate owners would be more active than BAA in exploiting existing opportunities.
"In Scotland, where there are no similar capacity constraints, we believe separate owners of Edinburgh and Glasgow would similarly improve their offerings."In Scotland, where there are no similar capacity constraints, we believe separate owners of Edinburgh and Glasgow would similarly improve their offerings.
He added: "In Scotland, BAA has until recently been noticeably slow to develop new routes at Glasgow and Edinburgh, while at Aberdeen, its investment plans are regarded as unambitious despite relatively high levels of profitability." He added: "In Scotland, BAA has until recently been noticeably slow to develop new routes at Glasgow and Edinburgh, while at Aberdeen, its investment plans are regarded as unambitious despite relatively high levels of profitability." class="" href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/08/baa_breakup.html">Robert Peston's blog class="" href="/1/hi/business/7564876.stm">Profile of BAA
The report found that common ownership of Edinburgh and Glasgow airports prevents competition between them.The report found that common ownership of Edinburgh and Glasgow airports prevents competition between them.
It found that Aberdeen's strong local monopoly position would not be solved by divestiture so suggested investigating what other measures might be appropriate, such as more regulation.It found that Aberdeen's strong local monopoly position would not be solved by divestiture so suggested investigating what other measures might be appropriate, such as more regulation.
But BAA Scotland said it believed its stewardship of Aberdeen, Edinburgh and Glasgow airports had served Scotland well.But BAA Scotland said it believed its stewardship of Aberdeen, Edinburgh and Glasgow airports had served Scotland well.
Last year 85% of air passengers in Scotland used one of those airports.Last year 85% of air passengers in Scotland used one of those airports.
Gordon Dewar, from BAA Scotland said, "We remain of the view that Glasgow and Edinburgh airports serve separate markets and that competition between the two is highly unlikely, regardless of ownership."Gordon Dewar, from BAA Scotland said, "We remain of the view that Glasgow and Edinburgh airports serve separate markets and that competition between the two is highly unlikely, regardless of ownership."
He added that the view was "shared by many of Scotland's leading business organisations".
He also expressed surprise at the suggestion that more regulation could be needed at Aberdeen Airport.He also expressed surprise at the suggestion that more regulation could be needed at Aberdeen Airport.
He said the CC's recommendations could have "serious implications" for a number of other Scottish airports.He said the CC's recommendations could have "serious implications" for a number of other Scottish airports.
Some business leaders have also expressed concern.
Ron Hewitt, chief executive of Edinburgh Chamber of Commerce said he thought the CC had "completely misread the situation in Scotland".
He added: "Glasgow and Edinburgh airports really serve separate markets and all the research bears this out.
"We will fight this unwarranted interference tooth and nail."
Labour transport spokesman Des McNulty said: "If Glasgow or Edinburgh Airport is to be sold by BAA, any potential buyer must show a strong commitment to continued investment."Labour transport spokesman Des McNulty said: "If Glasgow or Edinburgh Airport is to be sold by BAA, any potential buyer must show a strong commitment to continued investment."
Speaking on BBC Radio Scotland, industry analyst, John Strickland, said growth out of Prestwick Airport over the last decade may have influenced the Competition Commission's thinking.Speaking on BBC Radio Scotland, industry analyst, John Strickland, said growth out of Prestwick Airport over the last decade may have influenced the Competition Commission's thinking.
"I think it is giving the suggestion to the Competition Commission that if the ownership of Glasgow and Edinburgh is split, similar developments would take place there," he said."I think it is giving the suggestion to the Competition Commission that if the ownership of Glasgow and Edinburgh is split, similar developments would take place there," he said.
The report has been welcomed by low-cost airline easyJet which said it was recognition that the current system was flawed.The report has been welcomed by low-cost airline easyJet which said it was recognition that the current system was flawed.