The Competition Commission, which in March ruled that airport owner BAA must sell three of its seven UK airports, including London airports Gatwick and Stansted, in order to stimulate competition and improve services for passengers, has conceded that its original two-year timetable has been derailed by an appeal to the Competition Appeal Tribunal.
The company has appealed two aspects of the commission’s ruling, on the grounds of alleged bias and a complaint that it failed to take account of the effects of selling the airports in such dire market conditions.
The appeal is due to start in October and unlikely to conclude before next spring. However, even if the tribunal upholds the commission’s findings, BAA could still pursue the matter in the courts, which would be likely to put the sale of either Scottish airport back to 2013 – seven years after the company’s alleged monopoly of UK airports was first investigated by the Office of Fair Trading.
A spokesman for the commission refused to comment in detail on the case but said it was now “unrealistic” to expect the sale of all three airports – first Gatwick, then Stansted followed by either Edinburgh or Glasgow – to conclude within two years. “The timescale has yet to be finalised, but it is likely that the two-year period would commence at the end of any appeal process,” he said.
BAA, which is owned by Spanish infrastructure giant Ferrovial, has refused to budge on a reported £1.5bn price tag for Gatwick – around £100m higher than that offered by the leading bidder, with company chief executive Colin Matthews warning that it would not part with the airport for a below-par cost.
Aviation analysts claimed that any delay in selling its airports would benefit BAA. Iain Smith, commercial director at consultancy RDC Aviation, said: “At the moment there isn’t a lot of cash around for a sale and passenger numbers are significantly down.”
However, any delays in selling Gatwick could make it more likely that the Competition Commission appoints an independent adjudicator to oversee a forced sale if it wins its case.
A source close to the sale of Gatwick said: “There has been some frustration at BAA’s handling of the Gatwick sale and a suspicion that it is maybe more interested in putting off a deal in the hope that the market improves.
“It’s a potentially very high-risk strategy. Certainly there is a view within the commission that, if BAA were thought to be dragging its feet, there would be a hardening of attitudes and it would be more likely that an independent adjudicator be brought in to oversee a forced sale.”
A spokesman for BAA categorically denied that the company had been attempting to delay the sale of Gatwick, insisting that it had followed “due process”.
“Throughout the process we have been absolutely diligent and proactive. It’s not in our interest to delay this, as having an independent adjudicator oversee a sale would not be beneficial. However, if the sale were to take effect in two years rather than next year, it would be beneficial from a commercial perspective.”
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