In the report, the Competition Commission (CC) also found competition problems arising from the planning system, aspects of Government policy and the system of regulation.
The detailed provisional findings of its investigation into the market for the supply of airport services by BAA in the United Kingdom are published today at www.competition-commission.org.uk.
The CC has also published its proposed remedies on which it will now consult. If these are implemented, the CC will order BAA to sell two of its three London airports, and also either Edinburgh or Glasgow airport. The CC will reach its decisions on remedies on the basis of responses to its consultation at the same time as it makes its final decisions on the competition issues and publishes its final report in the first quarter of 2009.
The CC is now seeking views on which two of BAA”s three London airports should be sold and similarly which of Edinburgh or Glasgow airports should be sold. The CC is also seeking views on improvements to the effectiveness of the current system of regulation. Work by the CC on the regulatory system will take place at the same time as the review of the airports” regulatory system being undertaken by the Department for Transport (DfT), as part of which Professor Martin Cave is heading an advisory panel. The Secretary of State for Transport has stated that the current basis of price controls at Heathrow and Gatwick for the five years from 1 April 2008, and those at Stansted from 1 April 2009 will remain in force. Accordingly they will not be affected by any change in ownership of any of these airports. However, views are also being sought on the most appropriate regulatory framework as competition develops.
The CC is similarly seeking views on those aspects of Government policy which adversely affect competition by restricting or distorting the development of airport capacity. It sees no need to make similar recommendations on the planning system as these are already being addressed by Government. The full list of remedies options is set out in the notice of possible remedies published today and also available at: www.competition-commission.org.uk.
Read BAA's response to the Competition Commission here