20th August 2012

BAA finally concedes defeat over Stansted

BAA has today announced that it is to abandon its long-running legal battle to keep Stansted Airport and will now invite offers from potential purchasers. BAA had previously indicated that it would seek leave to appeal to the Supreme Court but on further consideration has decided not to do so.

Commenting on today’s BAA announcement, SSE economics adviser Brian Ross said: “We are pleased with this outcome. Historically the expansion of Stansted has been cross-subsidised by Heathrow. This type of cross-subsidisation will not be an option in future and that means we can all breathe a little easier.”

Brian Ross concluded: “The prolonged period of uncertainty over Stansted’s ownership has been unsettling for the airport’s employees, unhelpful for the local community and damaging for the airport’s business. Our hope is that with a new owner there will be an opportunity for genuine and meaningful dialogue based on maximising the local benefits of the airport and minimising its adverse impacts on the community.”

NOTES

  • The sale process is expected to take up to six months with a price tag of up to £1.2 billion.
  • This long-running saga began in June 2006 with the launch of a study by the Office of Fair Trading (OFT) into BAA’s dominance of the UK airports market. In March 2007 the OFT concluded that competition was being distorted by BAA’s market dominance and referred the case to the Competition Commission for more extensive investigation. The Competition Commission took two years to complete its investigation before concluding, in March 2009, that BAA should be forced to sell Gatwick, Stansted and one of its Scottish airports. BAA has since sold Gatwick and Edinburgh airports but has continued to resist the forced sale of Stansted. The legal battle over Stansted has lasted more than three years.
  • Stansted Airport’s passenger numbers have fallen 27% over the past five years, to 17.6 million in the 12 months ended 31 July 2012 compared to the 2007 peak of 24.0 million.
  • Following the sale of Stansted, BAA will still own Heathrow, Southampton, Glasgow and Aberdeen airports, giving it a 37 per cent share of the UK airports market.

Campaigning against proposals to expand Stansted Airport