BAA referral to Competition Commission marks beginning of the end

Stop Stansted Expansion (SSE) welcomes today’s announcement by the Office of Fair Trading (OFT) to refer BAA’s monopoly ownership of Heathrow, Gatwick and Stansted Airports to the Competition Commission for full investigation.

The referral follows an initial study by the OFT which found evidence of poor quality, poor service, high charges and poor customer satisfaction amounting to an abuse of market power by BAA and concluded that this stemmed from BAA’s control of more than 92% of the market in the South East.

The OFT said today that the case for a wide-ranging investigation into BAA by the Competition Commission was “now warranted”. The OFT received over 60 responses relating to BAA’s market behaviour from airlines, consumers and other organisations. SSE was one of the respondents calling for a full investigation into BAA by the Competition Commission followed by a break-up of the BAA.

SSE has been pressing for a break-up of BAA’s monopoly for nearly four years. Monopolists are not only characterised by their insensitivity towards customers and suppliers but also towards the communities in which they do business. BAA’s dealings with the local community affected by its operations at Stansted can be summed up as “a failure to listen and a failure to care”, said SSE Economics Adviser, Brian Ross.

Brian Ross continued: “This referral is long overdue and we are confident it marks the beginning of the end for BAA’s monopoly. We look forward to providing evidence to the Competition Commission aimed at achieving that outcome. Hopefully we can then make a fresh start in trying to establish a better working relationship with our airport neighbour.”

BAA today criticised “the OFT’s narrow focus on the structure of BAA” and claimed that “the market study does not set out a compelling case that BAA’s airports can compete more significantly, and serve the consumer interest better, under separate ownership.” SSE believes there is little doubt that the Competition Commission will conclude otherwise.