The future of BAA

Book excerpt: BAA Limited owns and operates seven UK airports: Heathrow, Gatwick, Stansted, Southampton, Glasgow, Edinburgh and Aberdeen. They handle nearly 150 million passengers a year, and are a vital part of the country's transport infrastructure. In the light of the Office of Fair Trading's referral of BAA to the Competition Commission, to investigate whether BAA's market position was limiting competition in the UK aviation sector, the Committee set up its own inquiry. It particularly wanted to consider: the regulatory framework; the quality of service provided; the size and quality of investment; any consequences following the acquisition of BAA by Ferrovial; the implications of further runway and terminal capacity; how more competition could be introduced into the market. The Committee concludes that the drawbacks of common ownership outweigh the advantages, and identifies a problem with service quality. It believes that increased competition is possible, and hopes the Competition Commission will ensure a healthy, competitive airport sector for the future.