SSE urges Competition Commission to stand firm on BAA break-up

Stop Stansted Expansion (SSE) has today made its third and final submission to the Competition Commission in connection with its investigation into the BAA monopoly.

SSE’s submission is in response to the Commission’s ‘Provisional Findings’ report last month which concluded that BAA should sell two of its three London airports. In effect this means Gatwick and Stansted because it is inconceivable that BAA would choose to sell Heathrow since it provides 65% of the profits earned by BAA’s seven UK airports.

Importantly, the Competition Commission has independent legal powers to order BAA to sell the airports (whereas its predecessor, the Monopolies Commission, could only make recommendations). In addition, the Commission can appoint an ‘Administrative Trustee’ to manage the airports until the sales take place and to oversee the sale process.

SSE considers that the Commission has presented thorough and compelling evidence to demonstrate that the present BAA monopoly is not in the public interest. Inevitably BAA will desperately seek to persuade the Commission to change its mind. SSE, however, urges the Commission to stand firm. Its catalogue of BAA’s many shortcomings, as set out in its Provisional Findings report, is robust and convincing. The conclusions should not be changed simply because BAA does not like them.

SSE has also given full backing to the Commission’s call for a Government review of the Air Transport White Paper and of the Department for Transport’s Traffic Distribution Rules (‘TDRs’). The TDRs force large numbers of cargo aircraft to use Stansted Airport by shutting them out of other airports. SSE regards the TDRs as an archaic restriction which cannot be justified either from an economic or an environmental standpoint.

In supporting the Commission’s call for a review of the Air Transport White Paper, SSE states in its final submission:

“SSE considers that there is a compelling case for a review of the ATWP, not only because the market circumstances will be very substantially changed through the ending of common ownership of the three main London airports but also because there have been significant changes in the market for air travel since 2003. Moreover, we question the rationale for a Government-imposed timetable for airport expansion and for location-specific policies. In any event the timetable for airport expansion in the south east as set down in the ATWP is now seriously out-of-date – which is perhaps testimony to the folly of a Government-imposed timetable in a private sector market environment, noting (as the ATWP itself records) that Governments do not build runways.”

The Competition Commission will review final submissions before publishing its final report next February.