Airlines welcome decision to force BAA to sell bases

RYANAIR AND Aer Lingus have welcomed a preliminary decision by Britain's Competition Commission to force BAA to sell two of its three London airports and either Glasgow or Edinburgh airport to boost competition.

BAA - the 42-year-old former government agency bought by Spain's Grupo Ferrovial SA for £10 billion (€12.7 million) two years ago - provides a poor service and has failed to plan for extra capacity, the UK Competition Commission said.

BAA, whose seven UK bases attracted 150 million flyers last year, said the analysis was "flawed". BAA handles 91 per cent of passengers in southeast England, where overcrowding and the chaotic opening of Terminal 5 at Heathrow led to demand for its break-up.

Europe's busiest airport, Heathrow, had the continent's worst delays in the first quarter, with 45 per cent of departures held for 15 minutes or more.

BAA will now be required to sell two of Heathrow, Gatwick and Stansted airports.

BAA said it had "no intention" of selling Heathrow, its biggest airport. It described the regulator's verdict as "flawed". A final decision on the break up of BAA will be made next April.

Jim Callaghan, Ryanair's director of legal and regulatory affairs, described it as a "good day for competition and consumers".

"We are very happy with the result and we firmly believe this will make a difference in the London area market," he said.

Stansted is Ryanair's biggest base and the Irish airline accounts for about 60 per cent of the facility's 23.5 million annual passenger throughput.

The budget airline has lobbied vigorously against a £4 billion plan to build a new terminal and runway at Stansted, arguing that this could be achieved at a much lower cost.

Ryanair also puts about one million passengers through Gatwick each year.

Mr Callaghan said Ryanair had no interest in owning Stansted but would work with any buyer on building a new low-cost terminal.

He said the airline had already drawn up a plan for a £400 million terminal that could handle 25 million additional passengers a year, doubling capacity at the airport.

Aer Lingus, which is one of the largest holders of valuable slot rights at Heathrow, also welcomed the Competition Commission's determination.

"We will have to see how it unfolds but if it happens and there is real competition between the airports then it will be very good and should mean lower costs," said Enda Corneille, Aer Lingus's corporate affairs director.

"There's plenty of room for improvement, especially at Heathrow," he said.

Aer Lingus also operates from Gatwick, Glasgow and Edinburgh airports.