25 July 2003
Britain's largest airport operator, BAA, should be broken up because its dominant position is hindering regional economic development, members of the Commons' transport select committee have said.
The MPs were strongly critical of capacity shortages in the Southeast, which they said meant demand for international slots was squeezing out UK regional links.
The committee examined the government's attempt, ahead of an expected white paper, to plan for airport capacity over the next 30 years.
Its report, published on July 17, said: 'The shortage of capacity in the Southeast is largely the result of the dominant position of BAA. It is ineffective and inappropriate to have a single private operator controlling such a large part of our aviation infrastructure.'
BAA owns Heathrow, Gatwick and Stansted airports, as well as airports at Southampton, Glasgow, Edinburgh and Aberdeen. It was privatised in 1986 and is regulated by the Civil Aviation Authority.
The report said that many witnesses had told the committee that BAA's control of the three major London airports had led to it being unresponsive to market demands, encouraging greater use of Stansted rather than tackling the lack of capacity at Heathrow and Gatwick.
'BAA believes that the current regulatory regime does not provide any incentive to improve capacity at any particular airport,' the report said.
The committee heard that Heathrow and Gatwick were full for most of the year and other capacity near London was filling rapidly. One result, they said, 'is the continued loss of routes from the regions, to be replaced by more profitable routes. This undermines the regions' ability to conduct business and attract inward investment.'
Airlines told the committee that it was not their job to provide regional services if they could make more money from other routes.
But the MPs argued that 'every region needs access to the Southeast', and that good air access to London was often essential to attract foreign investment.
BAA attacked the report as 'naïve'. Chief executive Mike Clasper said: 'Breaking up BAA would not be a remedy for the shortage of airport facilities in the Southeast. It would have the opposite effect, making it much harder to raise the huge investment sums necessary.'
PFjul2003
